ACQUISITION AGREEMENT
among
BOISE CASCADE CORPORATION,
a Delaware corporation
OXFORD PAPER COMPANY,
a Delaware corporation
and
XXXX OXFORD CORPORATION,
a Delaware corporation
THE XXXX CORPORATION,
an Ohio corporation
Dated September 28, 1996
TABLE OF CONTENTS
Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . .
1.1 Accounts Receivable. . . . . . . . . . . . . . . . .
1.2 Androscoggin . . . . . . . . . . . . . . . . . . . .
1.3 Androscoggin Stock . . . . . . . . . . . . . . . . .
1.4 Assets . . . . . . . . . . . . . . . . . . . . . . .
1.5 Assumed Liabilities. . . . . . . . . . . . . . . . .
1.6 Balance Sheet Adjustment . . . . . . . . . . . . . .
1.7 BCT Inc. . . . . . . . . . . . . . . . . . . . . . .
1.8 Boise Cascade. . . . . . . . . . . . . . . . . . . .
1.9 Business . . . . . . . . . . . . . . . . . . . . . .
1.10 Cleanup. . . . . . . . . . . . . . . . . . . . . . .
1.11 Closing. . . . . . . . . . . . . . . . . . . . . . .
1.12 Closing Statement. . . . . . . . . . . . . . . . . .
1.13 Code . . . . . . . . . . . . . . . . . . . . . . . .
1.14 Cogeneration Facility. . . . . . . . . . . . . . . .
1.15 Cogeneration Stock . . . . . . . . . . . . . . . . .
1.16 Collective Bargaining Agreements . . . . . . . . . .
1.17 Companies. . . . . . . . . . . . . . . . . . . . . .
1.18 Contracts. . . . . . . . . . . . . . . . . . . . . .
1.19 Election . . . . . . . . . . . . . . . . . . . . . .
1.20 Employees. . . . . . . . . . . . . . . . . . . . . .
1.21 Entities . . . . . . . . . . . . . . . . . . . . . .
1.22 Environmental Laws . . . . . . . . . . . . . . . . .
1.23 Environmental Liabilities and Costs. . . . . . . . .
1.24 Equipment. . . . . . . . . . . . . . . . . . . . . .
1.25 Excluded Assets. . . . . . . . . . . . . . . . . . .
1.26 Facility . . . . . . . . . . . . . . . . . . . . . .
1.27 Facility Leases. . . . . . . . . . . . . . . . . . .
1.28 Final Balance Sheet. . . . . . . . . . . . . . . . .
1.29 Final Closing Statement. . . . . . . . . . . . . . .
1.30 Gulf Island. . . . . . . . . . . . . . . . . . . . .
1.31 Hazardous Materials. . . . . . . . . . . . . . . . .
1.32 Historical Accounting Procedures . . . . . . . . . .
1.33 Historical Balance Sheet . . . . . . . . . . . . . .
1.34 Industrial Revenue Bonds . . . . . . . . . . . . . .
1.35 Intangible Rights. . . . . . . . . . . . . . . . . .
1.36 Inventory. . . . . . . . . . . . . . . . . . . . . .
1.37 Joint Facility . . . . . . . . . . . . . . . . . . .
1.38 Miscellaneous Assets . . . . . . . . . . . . . . . .
1.39 Multiple Mill Purchasing Agreements. . . . . . . . .
1.40 Net Book Value of the Business . . . . . . . . . . .
1.41 Oxford . . . . . . . . . . . . . . . . . . . . . . .
1.42 Pre-Closing Period . . . . . . . . . . . . . . . . .
1.43 Preliminary Closing Statement. . . . . . . . . . . .
1.44 Purchase Price . . . . . . . . . . . . . . . . . . .
1.45 Purchaser. . . . . . . . . . . . . . . . . . . . . .
1.46 Realty . . . . . . . . . . . . . . . . . . . . . . .
1.47 Release. . . . . . . . . . . . . . . . . . . . . . .
1.48 RCC. . . . . . . . . . . . . . . . . . . . . . . . .
1.49 Rumford Cogen. . . . . . . . . . . . . . . . . . . .
1.50 Rumford Cogeneration Support Contracts . . . . . . .
1.51 Rumford Falls. . . . . . . . . . . . . . . . . . . .
1.52 Rumford Falls Stock. . . . . . . . . . . . . . . . .
1.53 Rumford Mill Assets. . . . . . . . . . . . . . . . .
1.54 Shares . . . . . . . . . . . . . . . . . . . . . . .
1.55 Spare Parts. . . . . . . . . . . . . . . . . . . . .
1.56 Straddle Period. . . . . . . . . . . . . . . . . . .
1.57 Straddle Period Return . . . . . . . . . . . . . . .
1.58 Taxes. . . . . . . . . . . . . . . . . . . . . . . .
1.59 Tax Returns. . . . . . . . . . . . . . . . . . . . .
1.60 Timberlands. . . . . . . . . . . . . . . . . . . . .
1.61 Trucking Terminal Assets . . . . . . . . . . . . . .
1.62 Additional Terms . . . . . . . . . . . . . . . . . .
2. Purchase and Sale . . . . . . . . . . . . . . . . . . . .
3. Purchase Price. . . . . . . . . . . . . . . . . . . . . .
3.1 Purchase Price . . . . . . . . . . . . . . . . . . .
3.2 Balance Sheet Adjustment Determination . . . . . . .
3.3 Purchase Price Adjustments . . . . . . . . . . . . .
3.4 Allocation of Purchase Price . . . . . . . . . . . .
4. Terms of Payment. . . . . . . . . . . . . . . . . . . . .
4.1 Closing. . . . . . . . . . . . . . . . . . . . . . .
4.2 Final Settlement . . . . . . . . . . . . . . . . . .
4.3 Overaccruals, Property Taxes . . . . . . . . . . . .
5. Assumption of Liabilities . . . . . . . . . . . . . . . .
5.1 Assumed Liabilities. . . . . . . . . . . . . . . . .
5.2 Performance. . . . . . . . . . . . . . . . . . . . .
5.3 Nonassumption of Other Liabilities . . . . . . . . .
5.4 Consents to Assignment . . . . . . . . . . . . . . .
6. Representations and Warranties of Boise Cascade . . . . .
6.1 Organization and Standing. . . . . . . . . . . . . .
6.2 Authority. . . . . . . . . . . . . . . . . . . . . .
6.2.1 No Default . . . . . . . . . . . . . . . .
6.3 Financial. . . . . . . . . . . . . . . . . . . . . .
6.3.1 Historical Balance Sheet . . . . . . . . .
6.3.2 RCC. . . . . . . . . . . . . . . . . . . .
6.3.3 Absence of Certain Changes . . . . . . . .
6.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . .
6.5 Compliance with Laws; Permits. . . . . . . . . . . .
6.6 Litigation . . . . . . . . . . . . . . . . . . . . .
6.7 Contracts and Agreements . . . . . . . . . . . . . .
6.8 Conditions of and Title to Personal Property . . . .
6.8.1 Personal Property. . . . . . . . . . . . .
6.8.2 RCC. . . . . . . . . . . . . . . . . . . .
6.8.3 Rumford Cogen. . . . . . . . . . . . . . .
6.8.4 Inventory. . . . . . . . . . . . . . . . .
6.9 Real Property. . . . . . . . . . . . . . . . . . . .
6.9.1 Schedule . . . . . . . . . . . . . . . . .
6.9.2 No Assessments . . . . . . . . . . . . . .
6.9.3 Ownership. . . . . . . . . . . . . . . . .
6.9.4 Use of the Real Properties . . . . . . . .
6.9.5 Access to the Real Properties. . . . . . .
6.9.6 No Condemnation. . . . . . . . . . . . . .
6.9.7 Rumford Facility . . . . . . . . . . . . .
6.9.8 Utilities. . . . . . . . . . . . . . . . .
6.9.9 Native American Claims . . . . . . . . . .
6.10 Leased Facilities. . . . . . . . . . . . . . . . . .
6.11 All Necessary Assets . . . . . . . . . . . . . . . .
6.12 Intangible Rights. . . . . . . . . . . . . . . . . .
6.13 Liabilities. . . . . . . . . . . . . . . . . . . . .
6.14 Employee Relations . . . . . . . . . . . . . . . . .
6.14.1 Labor Relations. . . . . . . . . . . . . .
6.14.2 Employees. . . . . . . . . . . . . . . . .
6.15 Products . . . . . . . . . . . . . . . . . . . . . .
6.16 Employee Benefit Plans . . . . . . . . . . . . . . .
6.17 Environmental Matters. . . . . . . . . . . . . . . .
6.18 Rumford Cogen; RCC . . . . . . . . . . . . . . . . .
6.18.1 No Utility Status. . . . . . . . . . . . .
6.18.2 Project Documents. . . . . . . . . . . . .
6.18.3 Qualifying Facility. . . . . . . . . . . .
7. Representations and Warranties of Purchaser . . . . . . .
7.1 Purchaser Organization and Standing. . . . . . . . .
7.2 Purchaser Parent Organization and Standing . . . . .
7.3 Authority. . . . . . . . . . . . . . . . . . . . . .
7.4 No Default or Consents . . . . . . . . . . . . . . .
7.5 Condition of Assets. . . . . . . . . . . . . . . . .
8. Real Property . . . . . . . . . . . . . . . . . . . . . .
8.1 Mill Property. . . . . . . . . . . . . . . . . . . .
8.2 Other Property . . . . . . . . . . . . . . . . . . .
8.3 Permitted Encumbrances . . . . . . . . . . . . . . .
8.4 Imperfections. . . . . . . . . . . . . . . . . . . .
9. Covenants of Boise Cascade. . . . . . . . . . . . . . . .
9.1 Operations . . . . . . . . . . . . . . . . . . . . .
9.2 Corporate Examinations and Investigations. . . . . .
9.3 Permits, Consents, and Approvals . . . . . . . . . .
9.4 Accounts Receivable Lock Box . . . . . . . . . . . .
9.5 Antitrust Approvals. . . . . . . . . . . . . . . . .
9.6 Disclosure Schedule Supplements. . . . . . . . . . .
10. Covenants of Purchaser. . . . . . . . . . . . . . . . . .
10.1 Permits, Consents, and Approvals . . . . . . . . . .
10.2 Antitrust Approvals. . . . . . . . . . . . . . . . .
11. Employees . . . . . . . . . . . . . . . . . . . . . . . .
11.1 Transfer of Employees. . . . . . . . . . . . . . . .
11.2 Obligation to Hire . . . . . . . . . . . . . . . . .
11.3 Severance. . . . . . . . . . . . . . . . . . . . . .
11.4 Workers' Compensation, Medical Claims and
Retirees . . . . . . . . . . . . . . . . . . . . . .
11.5 No Third-Party Beneficiary . . . . . . . . . . . . .
11.6 Workers Adjustment and Retraining Act ("WARN") . . .
11.7 Flexible Spending Account Plans. . . . . . . . . . .
11.8 Incentive Plans. . . . . . . . . . . . . . . . . . .
11.9 Non-solicitation of Employees. . . . . . . . . . . .
12. Tax Matters . . . . . . . . . . . . . . . . . . . . . . .
12.1 Section 338(h)(10) Election. . . . . . . . . . . . .
12.2 Tax Return Filing and Payment of Taxes
Responsibility . . . . . . . . . . . . . . . . . . .
12.3 Transfer and Similar Taxes . . . . . . . . . . . . .
12.4 Tax Indemnification. . . . . . . . . . . . . . . . .
12.5 Procedures Relating to Indemnification of Tax
Claims . . . . . . . . . . . . . . . . . . . . . . .
12.6 Refunds and Credits. . . . . . . . . . . . . . . . .
12.7 Termination of Tax Sharing Agreements. . . . . . . .
12.8 Employee Payroll Information . . . . . . . . . . . .
12.9 Survival of Tax Provisions . . . . . . . . . . . . .
13. Risk of Loss. . . . . . . . . . . . . . . . . . . . . . .
14. Closing and Termination . . . . . . . . . . . . . . . . .
14.1 Closing. . . . . . . . . . . . . . . . . . . . . . .
14.2 Termination. . . . . . . . . . . . . . . . . . . . .
14.3 Effect of Termination. . . . . . . . . . . . . . . .
15. Conditions Precedent to Closing . . . . . . . . . . . . .
15.1 Purchaser . . . . . . . . . . . . . . . . . . . . .
15.1.1 Continued Truth of Representations and
Warranties . . . . . . . . . . . . . . . .
15.1.2 Performance of Obligations . . . . . . . .
15.1.3 Delivery of Closing Documents. . . . . . .
15.1.4 Third-Party Consents . . . . . . . . . . .
15.1.5 Legal Proceedings. . . . . . . . . . . . .
15.1.6 Condemnation . . . . . . . . . . . . . . .
15.1.7 Permits and Governmental Consents. . . . .
15.1.8 HSR Filing . . . . . . . . . . . . . . . .
15.1.9 Environmental Assessment . . . . . . . . .
15.2 Boise Cascade. . . . . . . . . . . . . . . . . . . .
15.2.1 Continued Truth of Representations and
Warranties . . . . . . . . . . . . . . . .
15.2.2 Performance of Obligations . . . . . . . .
15.2.3 Delivery of Closing Documents. . . . . . .
15.2.4 Legal Proceedings. . . . . . . . . . . . .
15.2.5 HSR Filing . . . . . . . . . . . . . . . .
16. Items to be Delivered by Boise Cascade. . . . . . . . . .
16.1 Closing. . . . . . . . . . . . . . . . . . . . . . .
16.1.1 Title Certificates . . . . . . . . . . . .
16.1.2 Opinion of Counsel . . . . . . . . . . . .
16.1.2.1 Organization. . . . . . . . . . . . .
16.1.2.2 Authority . . . . . . . . . . . . . .
16.1.2.3 Absence of Conflict . . . . . . . . .
16.1.2.4 Litigation. . . . . . . . . . . . . .
16.1.3 Certified Resolution . . . . . . . . . . .
16.1.4 Representations and Warranties . . . . . .
16.1.5 Consents to Assignment . . . . . . . . . .
16.1.6 Assignments. . . . . . . . . . . . . . . .
16.1.7 Deeds. . . . . . . . . . . . . . . . . . .
16.1.8 FIRPTA Certificate . . . . . . . . . . . .
16.1.9 Forms 8023 . . . . . . . . . . . . . . . .
16.1.10 Additional Items . . . . . . . . . . . . .
17. Items to be Delivered at Closing by Purchaser . . . . . .
17.1.1 Certified Resolutions. . . . . . . . . . .
17.1.2 Representations and Warranties . . . . . .
17.1.3 Opinion of Counsel . . . . . . . . . . . .
17.1.3.1 Organization. . . . . . . . . . . . .
17.1.3.2 Authorization . . . . . . . . . . . .
17.1.3.3 Absence of Conflict . . . . . . . . .
17.1.3.4 Litigation. . . . . . . . . . . . . .
17.1.4 Purchase Price . . . . . . . . . . . . . .
17.1.5 Additional Items . . . . . . . . . . . . .
18. Press Releases. . . . . . . . . . . . . . . . . . . . . .
19. Claims and Litigation . . . . . . . . . . . . . . . . . .
19.1 Scope of Representations and Warranties. . . . . . .
19.2 Survival of Representations and Warranties . . . . .
19.3 Indemnification by Boise Cascade . . . . . . . . . .
19.4 Environmental Indemnification by Boise Cascade . . .
19.4.1 During the Operating Period. . . . . . . . .
19.4.2 During and After the Operating Period. . . .
19.5 Indemnification by Purchaser . . . . . . . . . . . .
19.6 Limitation of Liability. . . . . . . . . . . . . . .
19.7 Procedure. . . . . . . . . . . . . . . . . . . . . .
19.8 Release of Hazardous Material Claims . . . . . . . .
19.9 Litigation Assistance. . . . . . . . . . . . . . .
19.10 Treatment of Indemnification Payments . . . . . .
19.11 Presumption of Sale . . . . . . . . . . . . . . .
19.12 Preservation of Records . . . . . . . . . . . . .
20. Costs . . . . . . . . . . . . . . . . . . . . . . . . .
21. Corporate Identification. . . . . . . . . . . . . . . .
21.1 Motor Vehicles . . . . . . . . . . . . . . . . . .
21.2 Correspondence . . . . . . . . . . . . . . . . . .
21.3 Promotional Materials. . . . . . . . . . . . . . .
21.4 Phone Books. . . . . . . . . . . . . . . . . . . .
21.5 Advertising. . . . . . . . . . . . . . . . . . . .
22. Notices . . . . . . . . . . . . . . . . . . . . . . . .
23. Transition Services . . . . . . . . . . . . . . . . . .
23.1 Computer Systems . . . . . . . . . . . . . . . . .
23.2 Transportation Services. . . . . . . . . . . . . .
23.3 Benefit Plan Services. . . . . . . . . . . . . . .
23.4 Other Services . . . . . . . . . . . . . . . . . .
24. Bulk Sales. . . . . . . . . . . . . . . . . . . . . . .
25. Further Assurances. . . . . . . . . . . . . . . . . . .
26. Governing Law . . . . . . . . . . . . . . . . . . . . .
27. Entire Agreement. . . . . . . . . . . . . . . . . . . .
28. Amendment . . . . . . . . . . . . . . . . . . . . . . .
29. Assignment. . . . . . . . . . . . . . . . . . . . . . .
30. Counterparts. . . . . . . . . . . . . . . . . . . . . .
31. Severance . . . . . . . . . . . . . . . . . . . . . . .
32. Unconditional and Unlimited Guaranties. . . . . . . . .
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("Agreement") is made and entered
into this 28th day of September, 1996, among BOISE
CASCADE CORPORATION, a Delaware corporation ("Boise Cascade"),
and OXFORD PAPER COMPANY, a Delaware corporation ("Oxford"), XXXX
OXFORD CORPORATION, a Delaware corporation ("Purchaser"), and THE
XXXX CORPORATION, an Ohio corporation ("Purchaser Parent").
The parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the terms
identified in this Section 1 shall have the meanings assigned to
them herein.
1.1 Accounts Receivable. The term "Accounts
Receivable" shall mean the obligations to make payment to Boise
Cascade or Oxford by all persons who have purchased products or
services in the ordinary course of the operation of the Business
prior to the Closing, including intercompany receivables, but
excluding any such obligations which have been written off the
books of Boise Cascade prior to Closing.
1.2 Androscoggin. The term "Androscoggin" shall mean
the Androscoggin Reservoir Company, a Maine corporation.
1.3 Androscoggin Stock. The term "Androscoggin Stock"
shall mean all shares of Androscoggin common stock par value $100
per share, held by Boise Cascade, Oxford, or Rumford Falls as of
the Closing.
1.4 Assets. The term "Assets" shall mean the Rumford
Mill Assets, the Rumford Falls Stock, the Cogeneration Stock, and
the Timberlands, collectively.
1.5 Assumed Liabilities. The term "Assumed
Liabilities" shall mean all of the liabilities and obligations of
Boise Cascade and Oxford relating to the Business which Purchaser
has specifically agreed to assume pursuant to Section 5.1.
1.6 Balance Sheet Adjustment. The term "Balance Sheet
Adjustment" shall have the meaning assigned to it in Section 3.2.
1.7 BCT Inc. The term "BCT Inc." means BCT Inc., a
Delaware corporation, and a wholly owned subsidiary of Boise
Cascade.
1.8 Boise Cascade. The term "Boise Cascade" shall
mean Boise Cascade Corporation, a Delaware corporation.
1.9 Business. The term "Business" shall mean the
ownership and management of timberlands in Maine, New Hampshire,
and Vermont, the harvest, sale, and purchase of timber therefrom
and from other timberlands in such geographic area, the
production of pulp, paper, and electrical and steam power at the
facility located in Rumford, Maine, and the sale of such goods
and services locally and throughout the United States and in
foreign countries. The Business is conducted by Boise Cascade
and Oxford directly and through their subsidiaries and affiliates
included in the definition of the term "Entities."
1.10 Cleanup. The term "Cleanup" means all actions,
excluding asbestos abatement and PCB equipment removal, required
to: (1) clean up, remove, treat, or remediate Hazardous
Materials in the indoor or outdoor environment; (2) prevent the
migration of Hazardous Materials so that they do not endanger or
threaten to endanger public health or welfare or the indoor or
outdoor environment; (3) perform preremedial studies and
investigations and post-remedial monitoring and care; (4) respond
to any government requests for information or documents in any
way relating to cleanup, removal, treatment, or remediation or
potential cleanup, removal, treatment, or remediation of
Hazardous Materials in the indoor or outdoor environment; or
(5) perform any other remediation activities required by a
governmental order issued in connection with any Release of
Hazardous Materials.
1.11 Closing. The term "Closing" shall mean the
simultaneous conveyance by Boise Cascade and Oxford of the Assets
to Purchaser and the payment by Purchaser of the Purchase Price
to Boise Cascade. The Closing shall be held at the time, date,
and location specified in Section 14 hereof and shall be deemed
to occur as of 12:00 a.m. Eastern standard time on such date.
1.12 Closing Statement. The term "Closing Statement"
shall mean the Preliminary and Final Closing Statements,
collectively or singularly as the context may indicate.
1.13 Code. The term "Code" shall mean the Internal
Revenue Code of 1986, as amended, and the Treasury regulations
promulgated thereunder.
1.14 Cogeneration Facility. The term "Cogeneration
Facility" shall mean the cogeneration facility operated by RCC.
1.15 Cogeneration Stock. The term "Cogeneration
Stock" shall mean all of the issued and outstanding shares of
Rumford Cogen common stock, no par value, as of Closing.
1.16 Collective Bargaining Agreements. The term
"Collective Bargaining Agreements" shall mean all of the labor
agreements applicable to employees employed in the Business.
Such agreements are identified in Schedule 6.7 hereof.
1.17 Companies. The term "Companies" shall mean
Rumford Falls and Rumford Cogen.
1.18 Contracts. The term "Contracts" shall mean all
executory leases, licenses, contracts, and agreements of Boise
Cascade and Oxford that have previously been entered into in the
ordinary course of their conduct of, and are related to, the
Business or are entered into after the date hereof in accordance
with the terms of this Agreement. Boise Cascade's Multiple Mill
Purchasing Agreements are excluded from the term "Contracts."
1.19 Elections. The term "Elections" shall mean, with
respect to Rumford Falls and Rumford Cogen, the election to be
made by Purchaser, Boise Cascade, and Oxford pursuant to
Section 338(h)(10) of the Code, as described in Section 12.1
hereof.
1.20 Employees. The term "Employees" shall mean all of
the persons employed by Boise Cascade in its conduct of the
Business as of Closing, including the sales force for the
products produced at the Rumford Facility, whether or not such
persons are actively at work at Closing and including, without
limitation, persons on paid or unpaid leaves of absence, layoff,
short-term disability, workers' compensation, or receiving
accident and sickness benefits.
1.21 Entities. The term "Entities" shall mean,
collectively, Boise Cascade, Oxford, Rumford Falls, Rumford
Cogen, and RCC.
1.22 Environmental Laws. The term "Environmental Laws"
shall mean any and all federal, state or local laws, statutes,
ordinances, codes, rules, regulations, orders, decrees and
directives imposing liability or standards of conduct for or
relating to the protection of the environment, including, but not
limited to, the following statutes as now written and amended,
and as amended hereafter, including any and all regulations
promulgated thereunder and any and all state counterparts: the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, et seq.
the Oil Pollution Act, 33 U.S.C. Section 2701, et seq., the Clean Air
Act, 42 U.S.C. Section 7401, et seq., the Toxic Substances Control Act,
15 U.S.C. Section 2601, et seq., the Solid Waste Disposal Act,
42 U.S.C. Section 6901, et seq., the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. Section 9601,
et seq., the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. Section 11001, et seq., and the Safe Drinking Water
Act, 42 U.S.C. Section 300f, et seq.
1.23 Environmental Liabilities and Costs. The term
"Environmental Liabilities and Costs" means all costs of Cleanup,
all fines and penalties, and the cost of defending, settling, or
otherwise disposing of any claim by a third party for injury to
or death of any person or damage to property resulting from any
Release of Hazardous Materials into the indoor or outdoor
environment as a result of the ownership or operation of the
Assets during the Operating Period.
1.24 Equipment. The term "Equipment" shall mean (i) all
of the computer hardware and software owned by Boise Cascade or
Oxford and located at the Rumford Facility or any of the Leased
Facilities and (ii) all other machinery, equipment, and similar
items of tangible personal property which are (in either case)
owned by Boise Cascade or Oxford and used or held for use
primarily in the operation of the Business, including, without
limitation, all removable trade fixtures and leasehold
improvements, construction in progress, furniture and
furnishings, office machinery and equipment, tools, plant and
warehouse machinery and equipment, rolling stock, delivery, and
other vehicles, and similar items located at the Facilities,
excluding, however, the Excluded Assets.
1.25 Excluded Assets. The term "Excluded Assets" shall
mean (i) any asset described in Schedule 1.25 hereof or otherwise
specifically referred to herein as an Excluded Asset; or (ii) any
other asset owned, leased or licensed by Boise Cascade which is
not located at the Rumford Facility and/or Leased Facilities and
whose use is not devoted primarily to the Rumford Facility or
Leased Facilities. Any asset listed in Schedule 1.25 shall be an
Excluded Asset notwithstanding the fact that it may be included
in the definition of any of the classes of Assets described
herein.
1.26 Facility. The term "Facility" shall mean any
plant, warehouse, sales office, or other site of a Business
operation and may be preceded by the name of the community in
which the operation is located (e.g., Rumford Facility).
1.27 Facility Leases. The term "Facility Leases" shall
mean the leases identified in Part I of Schedule 1.27 hereof.
1.28 Final Balance Sheet. The term "Final Balance
Sheet" means the balance sheet that shall reflect, as of the
Closing, all assets owned by Boise Cascade, Oxford, Rumford
Falls, and Rumford Cogen and used by them primarily in the
conduct of the Business, and all undischarged liabilities
incurred by Boise Cascade, Oxford, Rumford Falls, and Rumford
Cogen in the conduct of the Business, stated on a consolidated
basis, exclusive of (i) any Excluded Assets; and (ii) any
liabilities of Boise Cascade or Oxford not constituting Assumed
Liabilities. The Final Balance Sheet shall be based on the books
and records of the Business and shall be prepared on a basis
consistent with the Historical Balance Sheet utilizing Historical
Accounting Procedures, except for the adjustments reflected in
Schedule 1.33. Such books and records shall not include (i)
entries for specific assets and liabilities of RCC, which are
accounted for on an equity basis pursuant to Historical
Accounting Procedures, (ii) entries for Androscoggin and Gulf
Island, which are accounted for on a historical cost basis, or
(iii) any obligations for borrowed money incurred by Boise
Cascade or any of its subsidiaries or affiliates to finance the
acquisition of any of the assets recorded on the books and
records of the Business.
1.29 Final Closing Statement. The term "Final Closing
Statement" shall mean the document bearing that name to be
prepared pursuant to Section 4.2.1 hereof by Boise Cascade from
the books and records of the Business as of Closing. It shall be
prepared in accordance with the Historical Accounting Procedures
used in the preparation of the Historical Balance Sheet,
provided, however, that the Final Closing Statement shall not
include (i) any liabilities not assumed by Purchaser pursuant to
Section 5.1 hereof; (ii) the liabilities set forth in
Schedule 5.3; and (iii) the Excluded Assets.
1.30 Gulf Island. The term "Gulf Island" shall mean
Gulf Island Pond Oxygenation Project, a general partnership in
which Boise Cascade holds a 30.5% equity interest.
1.31 Hazardous Materials. The term "Hazardous
Material" shall mean (a) any "hazardous substance" as defined in
the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601(14), et seq.), as amended, and
the regulations promulgated pursuant thereto ("CERCLA"), or any
similar state law; (b) any petroleum, including crude oil or any
extraction thereof; (c) natural gas liquids or liquefied natural
gas; and (d) any asbestos, polychlorinated biphenyl ("PCB") or
any material or thing containing such substance in a
concentration which makes its disposal or release subject to
regulatory control.
1.32 Historical Accounting Procedures. The term
"Historical Accounting Procedures" means the accounting policies
and procedures in use by Boise Cascade in respect of the Business
on June 30, 1996, except that no cash (other than a xxxxx cash
account if it is less than $500) will be included in any balance
sheet. Such procedures are those used to prepare the divisional
financial statements that are combined to prepare the audited,
consolidated financial statements of Boise Cascade.
1.33 Historical Balance Sheet. The term "Historical
Balance Sheet" shall mean the internally prepared June 30, 1996,
balance sheet for the Business, which includes the assets and
liabilities of Rumford Cogen and Rumford Falls on a consolidated
basis, and is attached as Schedule 1.33 hereto.
1.34 Industrial Revenue Bonds. The term "Industrial
Revenue Bonds" means the financings described in Schedule 1.34.
1.35 Intangible Rights. The term "Intangible Rights"
shall mean the various registered copyrights, patents,
trademarks, service marks and applications therefor listed in
Schedule 1.35, licenses with respect to any of the foregoing,
trade secrets, proprietary manufacturing information and know-how
and customer and supplier lists with respect to the Business and
the goodwill associated with any of the foregoing and all other
similar intangible rights of any form or nature which are owned
by Boise Cascade or Oxford and used by them exclusively in their
conduct of the Business but excluding the Excluded Assets.
1.36 Inventory. The term "Inventory" shall mean all
inventories of raw materials, logs, wood chips, chemicals, resin,
strapping, dies, tools, pallets, paper stock, inks, spare parts,
operating and office supplies, shipping supplies, gasoline,
diesel, and other fuel supplies, miscellaneous supplies and
materials owned by Boise Cascade or Oxford and used in the
Business and either on hand at the Facilities, at offsite public
warehouses, or in transit thereto as of Closing; and all work in
process and finished goods not yet sold which are owned by Boise
Cascade or which were delivered by Boise Cascade in the ordinary
course of its conduct of the Business pursuant to terms where
title has not yet passed to the buyer thereof; together with any
rights of Boise Cascade to the warranties, if any, and to the
extent assignable, received from manufacturers and sellers of the
raw materials and rollstock, and any related claims, credits,
right of recovery and set-off with respect thereto, but excluding
finished goods inventory held by Boise Cascade at its regional
service centers, none of which will be recorded on the Final
Balance Sheet.
1.37 Joint Facility. The term "Joint Facility" means
any Facility set forth in Schedule 1.37.
1.38 Miscellaneous Assets. The term "Miscellaneous
Assets" shall mean all of the assets, properties, and rights of
the Business, other than the Excluded Assets, of every kind and
description, real or personal, tangible or intangible, whether or
not fully depreciated, capitalized or expensed, to the extent
such assets are (i) presently used primarily in the Business, or
subsequently acquired for use in the conduct of the Business
prior to Closing, (ii) either located at the Facilities, in the
process of being delivered to the Facilities as of Closing, or
reserved primarily for use at the Facilities, (iii) not within
the definition of Realty, Facilities, Equipment, Inventory, Spare
Parts, Contracts, Collective Bargaining Agreements, Intangible
Rights, Accounts Receivable, or Excluded Assets, and (iv) owned
by Boise Cascade or Oxford as of Closing.
1.39 Multiple Mill Purchasing Agreements. The term
"Multiple Mill Purchasing Agreements" means contracts covering
goods or services that are applicable to the Business and at
least one location outside of the Business, such as Boise
Cascade's Corporate and Paper Division bulk purchasing or
engineering services arrangements with third parties, which apply
by their terms to multiple xxxxx or facilities in addition to the
Rumford Facility.
1.40 Net Book Value of the Business. The term "Net
Book Value of the Business" means the amount by which assets
exceed liabilities as reflected on the Final Balance Sheet.
1.41 Oxford. The term "Oxford" shall mean Oxford Paper
Company, a Delaware corporation, a wholly owned subsidiary of
Boise Cascade.
1.42 Pre-Closing Period. The term "Pre-Closing Period"
shall mean that portion of any Straddle Period that ends on the
Closing date.
1.43 Preliminary Closing Statement. The term
"Preliminary Closing Statement" shall mean the statement prepared
by Boise Cascade for purposes of the Closing which shall include
its best estimate of the Purchase Price. The Preliminary Closing
Statement shall be in the form attached as Schedule 1.43 and
shall be prepared in accordance with the Historical Accounting
Procedures.
1.44 Purchase Price. The term "Purchase Price" shall
have the meaning assigned to it in Section 3.1.
1.45 Purchaser. The term "Purchaser" shall mean Xxxx
Oxford Corporation, a Delaware corporation.
1.46 Realty. The term "Realty" shall mean (i) the
parcels of real property described in Schedule 1.46 hereof,
together with all improvements located thereon and all rights
appurtenant thereto, and (ii) any other real property owned by
Boise Cascade or Oxford and utilized by either of them in the
Business which are located in the states of Maine, Vermont, or
New Hampshire. Timberlands are excluded from the definition of
Realty. Specific pieces of real property may be referred to from
time to time herein by a combination of the name of the community
in which the real property is located and the term "Realty."
1.47 Release. The term "Release" means any release,
spill, emission, discharge, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching, or migration into the
indoor or outdoor environment (including, without limitation,
ambient air, surface water, groundwater, and surface or
subsurface strata) or into or out of any property, including the
movement of Hazardous Materials through or in the air, soil,
surface water, groundwater, or property, but excluding any such
Release by a third party originating on property adjoining or in
the vicinity of Realty or Timberlands.
1.48 RCC. The term "RCC" shall mean Rumford
Cogeneration Company Limited Partnership, a Maine limited
partnership.
1.49 Rumford Cogen. The term "Rumford Cogen" shall
mean Rumford Cogeneration Inc., a Delaware corporation, a wholly
owned subsidiary of Boise Cascade and the general partner of RCC.
1.50 Rumford Cogeneration Support Contracts. The term
"Rumford Cogeneration Support Contracts" shall mean the contracts
between RCC and Oxford or Boise Cascade listed in Schedule 1.50.
1.51 Rumford Falls. The term "Rumford Falls" shall
mean Rumford Falls Power Company, a Maine corporation, a wholly
owned subsidiary of Xxxxxx.
0.00 Xxxxxxx Falls Stock. The term "Rumford Falls
Stock" shall mean all of the issued and outstanding shares of
Rumford Falls common stock, par value of $100 per share, as of
the Closing.
1.53 Rumford Mill Assets. The term "Rumford Mill
Assets" shall mean the Accounts Receivable, Contracts, Collective
Bargaining Agreements, Equipment, Facility Leases, Inventory,
Miscellaneous Assets, Realty, Spare Parts, and Intangible Rights,
but excluding the Excluded Assets.
1.54 Shares. The term "Shares" shall mean the Rumford
Falls Stock and the Cogeneration Stock.
1.55 Spare Parts. The term "Spare Parts" shall mean
(i) all spare parts owned by Boise Cascade or Oxford and either
located at the Facilities or reserved primarily for use at the
Facilities, and (ii) all spare parts installed on the Equipment
and currently being amortized.
1.56 Straddle Period. The term "Straddle Period" shall
mean any taxable period that begins before and ends after the
Closing date.
1.57 Straddle Period Return. The term "Straddle Period
Return" shall mean any Tax Return for a Straddle Period.
1.58 Taxes. The term "Taxes" shall mean all taxes,
levies, or other like assessments, charges, or fees (including
estimated taxes, charges, and fees), including, without
limitation, income, corporation, add-on minimum, ad valorem,
advance corporation, gross receipts, transfer, excise, property,
sales, use, value-added, license, payroll, employment, severance,
pay as you earn ("PAYE"), withholding on amounts paid by or to
the relevant party, social security, and franchise or other
governmental taxes or charges imposed by the United States or any
state, county, local, or foreign government or subdivision or
agency thereof; and such term shall include any interest,
penalties, or additions to tax attributable to such taxes.
1.59 Tax Returns. The term "Tax Returns" shall mean
any report, return, or other information, including, without
limitation, property tax bills, filed, or required to be filed,
with any taxing authority with respect to Taxes.
1.60 Timberlands. The term "Timberlands" shall mean
all of the timberlands in the states of Maine, Vermont, and
New Hampshire owned by Boise Cascade or Oxford as further
described in summary fashion in Schedule 1.60 hereof.
1.61 Trucking Terminal Assets. The term "Trucking
Terminal Assets" shall mean those trucks, trailers, and related
assets owned by Boise Cascade or BCT Inc. located at the Rumford
Facility which are used in the conduct of the Business and are
not recorded on the Historical Balance Sheet.
1.62 Additional Terms. The following terms have the
meaning set forth in the following sections.
Accounting Records. The term "Accounting Records"
shall have the meaning set forth in Section 19.12.
Adjustment Report. The term "Adjustment Report"
shall have the meaning set forth in Section 4.2.2.
Agreement. The term "Agreement" shall have the
meaning set forth in the recitals.
Allocation. The term "Allocation" shall have the
meaning set forth in Section 3.4.
Boise Cascade Preliminary Tax Payment. The term
"Boise Cascade Preliminary Tax Payment" shall have the meaning
set forth in Section 12.2.3.
Claims. The term "Claims" shall have the meaning
set forth in Section 19.3.
CO. The term "CO" shall have the meaning set
forth in Section 6.9.4.
COBRA. The term "COBRA" shall have the meaning
set forth in Section 11.4.3.
Employee Benefit Plans. The term "Employee
Benefit Plans" shall have the meaning set forth in Section 6.16.
Environmental Assessment. The term "Environmental
Assessment" shall have the meaning set forth in Section 6.17.10.
ERISA. The term "ERISA" shall have the meaning
set forth in Section 6.16.
FERC. The term "FERC" shall have the meaning set
forth in Section 6.18.1.
Final Determination. The term "Final
Determination" shall have the meaning set forth in Section 4.2.1.
Final Purchase Date. The term "Final Purchase
Date" shall have the meaning set forth in Section 4.2.4.
Flex Plans. The term "Flex Plans" shall have the
meaning set forth in Section 11.7.
FPA. The term "FPA" shall have the meaning set
forth in Section 6.18.1.
GAAP. The term "GAAP" shall have the meaning set
forth in Section 6.3.2.
Gain Sharing Plan. The term "Gain Sharing Plan"
shall have the meaning set forth in Section 11.8.
HSR Act. The term "HSR Act" shall have the
meaning set forth in Section 9.5.
Indemnified Party. The term "Indemnified Party"
shall have the meaning set forth in Section 19.7.
Indemnifying Party. The term "Indemnifying Party"
shall have the meaning set forth in Section 19.7.
Independent Accountants. The term "Independent
Accountants" shall have the meaning set forth in Section 4.2.3.
Issuer. The term "Issuer" shall have the meaning
set forth in Section 5.1.4.
Large Cleanup. The term "Large Cleanup" shall
have the meaning set forth in Section 19.8.
Liabilities. The term "Liabilities" shall have
the meaning set forth in Section 6.13.
LIBOR Rate. The term "LIBOR Rate" shall have the
meaning set forth in Section 4.2.5.
Loan Agreement. The term "Loan Agreement" shall
have the meaning set forth in Section 5.1.4.
Modified Aggregate Deemed Sale Price. The term
"Modified Aggregate Deemed Sale Price" shall have the meaning set
forth in Section 12.1.2.
Negative Balance Sheet Adjustment. The term
"Negative Balance Sheet Adjustment" shall have the meaning set
forth in Section 3.2.
New Plans. The term "New Plans" shall have the
meaning set forth in Section 11.7.
Operating Period. The term "Operating Period"
shall have the meaning set forth in Section 6.17.1.
Permitted Encumbrances. The term "Permitted
Encumbrances" shall have the meaning set forth in Section 8.3.
Phase I Environmental Assessment. The term
"Phase I Environmental Assessment" shall have the meaning set
forth in Section 6.17.10.
Phase II Environmental Assessment. The term
"Phase II Environmental Assessment" shall have the meaning set
forth in Section 6.17.10.
Positive Balance Sheet Adjustment. The term
"Positive Balance Sheet Adjustment" shall have the meaning set
forth in Section 3.2.
Pre-Closing Returns. The term "Pre-Closing
Returns" shall have the meaning set forth in Section 12.2.1.
Preliminary Payment. The term "Preliminary
Payment" shall have the meaning set forth in Section 4.1.
PUHCA. The term "PUHCA" shall have the meaning
set forth in Section 6.18.1.
Records. The term "Records" shall have the
meaning set forth in Section 19.12.
Reserved Identification. The term "Reserved
Identification" shall have the meaning set forth in Section 21.
Service. The term "Service" shall have the
meaning set forth in Section 11.2.
Settlement Date. The term "Settlement Date" shall
have the meaning set forth in Section 4.2.4.
Site. The term "Site" shall have the meaning set
forth in Section 6.17.4.
Tax Claim. The term "Tax Claim" shall have the
meaning set forth in Section 12.5.1.
Tax Indemnification Obligation. The term "Tax
Indemnification Obligation" shall have the meaning set forth in
Section 12.2.3.
Tax Indemnified Party. The term "Tax Indemnified
Party" shall have the meaning set forth in Section 12.5.1.
Tax Indemnifying Party. The term "Tax
Indemnifying Party" shall have the meaning set forth in
Section 12.5.1.
Transfer Taxes. The term "Transfer Taxes" shall
have the meaning set forth in Section 12.3.
Transferred Employees. The term "Transferred
Employees" shall have the meaning set forth in Section 11.2.
Transferred Hourly Employees. The term
"Transferred Hourly Employees" shall have the meaning set forth
in Section 11.2.
Transferred Salaried Employees. The term
"Transferred Salaried Employees" shall have the meaning set forth
in Section 11.2.
Underground Storage Tanks. The term "Underground
Storage Tanks" shall have the meaning set forth in
Section 6.17.5.
WARN Act. The term "WARN Act" shall have the
meaning set forth in Section 6.14.1.
2. Purchase and Sale. At the Closing, Boise Cascade and
Oxford shall sell and convey to Purchaser, and Purchaser shall
purchase and accept the Assets from Boise Cascade and Oxford.
Also at the Closing, Purchaser shall assume the Assumed
Liabilities.
3. Purchase Price.
3.1 Purchase Price. The purchase price for the Assets
shall be the sum of US$643,604,000, adjusted by adding thereto
any Positive Balance Sheet Adjustment or subtracting therefrom
any Negative Balance Sheet Adjustment determined pursuant to
Section 3.2 hereof. Such amount, as further adjusted pursuant to
Section 3.3 hereof, shall be referred to herein as the "Purchase
Price."
3.2 Balance Sheet Adjustment Determination. The
"Balance Sheet Adjustment" shall be equal to the amount by which
the Net Book Value of the Business exceeds US$603,291,000 (a
"Positive Balance Sheet Adjustment") or is less than
US$603,291,000 (a "Negative Balance Sheet Adjustment").
3.3 Purchase Price Adjustments. The Purchase Price
shall be subject to the following additional adjustments:
3.3.1 The Purchase Price shall be increased or
decreased, as appropriate, by an amount equal to any amounts
either to be received or paid out under any Contracts or Facility
Leases, or related to any real or personal property taxes and
other continuing periodic expenses of the Business which shall be
prorated as of the Closing except to the extent such prorations
are reflected in the Closing Statements. For example, if Boise
Cascade shall have paid expenses which also covered periods after
the Closing, the Purchase Price shall be increased by the amount
of the prorated portion of such prepaid expenses relating to the
post-Closing period, except to the extent that such prepayment is
reflected as an asset on the Final Balance Sheet. Similarly, if
certain payments, such as real estate taxes, are to be paid in
arrears following the Closing, but also cover periods prior to
the Closing, the Purchase Price shall be reduced by the prorated
amount reflecting the pre-Closing period, except to the extent
that any such amounts are reflected as a liability on the Final
Balance Sheet.
3.3.2 The Purchase Price shall be increased or
decreased by the adjustment provided for in Section 11.7.
3.3.3 The Purchase Price shall be increased or
decreased to reflect the obligations of the parties under
Section 4.3 herein.
3.4 Allocation of Purchase Price. Purchaser shall
prepare, and Purchaser, Boise Cascade, and Oxford shall agree to,
the allocation of the Purchase Price and the Assumed Liabilities
(other than contingent liabilities) among the Assets to be
purchased hereunder which allocation shall be finalized as soon
as practicable after the Closing, but not later than six months
after Closing, but shall be adjusted to take account of any post-
closing purchase price adjustments (the "Allocation"). The
Allocation shall be made in accordance with Section 1060 of the
Code and applicable Treasury regulations. The Purchaser, Boise
Cascade, and Oxford shall (i) be bound by the Allocation for
purposes of determining any Taxes, (ii) prepare and file, and
cause their affiliates to prepare and file, their Tax Returns on
a basis consistent with the Allocation and (iii) take no
position, and cause their affiliates to take no position,
inconsistent with the Allocation on any applicable Tax Return, in
any proceeding before any taxing authority or otherwise. In the
event that the Allocation is disputed by any taxing authority,
the party receiving notice of the dispute shall promptly notify
the other party hereto concerning resolution of the dispute.
4. Terms of Payment.
4.1 Closing. At the Closing, Boise Cascade shall
prepare and deliver to Purchaser the Preliminary Closing
Statement showing the estimated Purchase Price based on the best
information then available to Boise Cascade. At Closing,
Purchaser shall pay the full amount of the Purchase Price to
Boise Cascade by wire transfer of immediately available US funds
to an account designated by Boise Cascade at least three
business days prior to Closing. The amount so paid shall be
referred to as the "Preliminary Payment".
4.2 Final Settlement.
4.2.1 Within 45 days after the Closing, Boise
Cascade shall prepare and deliver to Purchaser a Final Balance
Sheet and a final determination of the Purchase Price which shall
be set forth on the Final Closing Statement ("Final
Determination").
4.2.2 Purchaser shall have a period of 30 days
to audit or review the Final Closing Statement, including the
Final Balance Sheet upon which it is based, to determine that it
has been prepared in accordance with the requirements of this
Agreement. Boise Cascade shall make available its work papers,
or the work papers of any accounting firm retained by Boise
Cascade, for review and examination by Purchaser and its
representatives. On or prior to the expiration of such 30 day
period, Purchaser shall deliver to Boise Cascade either (i) the
written acknowledgment of Purchaser's acceptance of the Final
Closing Statement; or (ii) a written report setting forth any
proposed adjustments thereto ("Adjustment Report"). A failure to
make the delivery within such 30 day period shall constitute
acceptance of the Final Closing Statement as delivered.
4.2.3 If Boise Cascade and Purchaser fail to
agree on any of Purchaser's proposed adjustments to the Final
Closing Statement contained in the Adjustment Report within 20
days after Purchaser delivers the Adjustment Report, then Boise
Cascade and Purchaser mutually agree that their respective
independent accountants shall jointly select an accountant
from another of the "Big 6 Accounting Firms" ("Independent
Accountants"), who shall make the final determination with
respect to the correctness of the proposed adjustments in the
Adjustment Report based upon the terms and conditions of this
Agreement after presentations made by Boise Cascade and
Purchaser. The decision of the Independent Accountants shall be
final and binding on Boise Cascade and Purchaser. The parties
shall request that the Independent Accountants make a prompt
determination and shall cooperate to achieve such a resolution.
The costs and expenses of the Independent Accountants and their
services rendered pursuant to this Section 4.2.3 shall be borne
equally by Boise Cascade and Purchaser.
4.2.4 The date on which the Final Closing
Statement is accepted by Purchaser, or on which all disputes in
respect thereof are resolved, shall hereinafter be referred to as
the "Settlement Date" and the amount so determined shall be
referred to as the "Final Purchase Price."
4.2.5 In the event the Final Purchase Price is
greater than the Preliminary Payment, then Purchaser shall pay to
Boise Cascade within five days after the Settlement Date an
aggregate amount equal to such excess plus interest thereon from
the Closing at the per annum interest rate of one percent over
one month LIBOR, as reported on Rueters screen on the Closing
date and on each date thereafter on which a loan based on one
month LIBOR would customarily be reset until such balance is paid
in full (the "LIBOR Rate"). In the event the Final Purchase
Price is less than the Preliminary Payment, Boise Cascade shall
pay to Purchaser within five days after the Settlement Date an
aggregate amount equal to such deficiency plus interest thereon
from the Closing at the per annum interest rate of one percent
over the LIBOR Rate.
4.3 Overaccruals, Property Taxes. Certain accrued
liabilities for accrued real and personal property tax
liabilities which will be assumed by Purchaser will be
established by Boise Cascade using its past experience and best
estimate of the actual liability. When those liabilities are
finally determined, Purchaser shall notify Boise Cascade of the
actual liability and provide such supporting documentation as may
be reasonably required by Boise Cascade to establish the actual
liability. To the extent the liability was over- (or under-)
accrued, the parties shall promptly make the necessary adjusting
payment, without interest.
5. Assumption of Liabilities.
5.1 Assumed Liabilities. At the Closing, Purchaser
shall assume the following liabilities of Boise Cascade or
Oxford, as the case may be:
5.1.1 All undischarged current liabilities and
obligations of Boise Cascade and Oxford, which arose in the
ordinary course of and are related to the operation of the
Business prior to the Closing and which are recorded pursuant to
Historical Accounting Procedures in the books and records of
Boise Cascade for the Business at Closing but only to the extent
of the dollar amount reflected therein;
5.1.2 All liabilities and obligations of Boise
Cascade and Oxford arising from and after the Closing under the
Contracts, Facility Leases, Rumford Cogeneration Support
Contracts, and any permits or licenses included in the Assets,
which are not required by the Historical Accounting Procedures to
be recorded in the Closing Statements;
5.1.3 Liabilities and obligations relating to
the employee benefit plans, workers' compensation, and
Transferred Employees in accordance with, but only to the extent
contemplated by, Sections 11.1 through 11.8 of this Agreement.
5.1.4 The obligations of Boise Cascade arising
after Closing pursuant to Sections 5.7 and 5.8 (subject to
Section 5.11) of the Loan Agreement dated as of June 1, 1990
("Loan Agreement"), by and between the Finance Authority of Maine
("Issuer") and Boise Cascade, provided that at such time as
Purchaser decides in its sole discretion to remove the equipment,
which is subject to such covenants, from service or take any
other actions prohibited by such sections of the Loan Agreement,
it shall give Boise Cascade 90 days' prior written notice of any
such removal or other actions, and Boise Cascade shall, prior to
the expiration of such notice period, procure for Purchaser the
right to refrain from further performance of such covenants.
Such action shall be taken by waiver or release by the Issuer of
such covenants or, if necessary, prepayment of the bonds which
are secured by a lien granted by the Issuer on said Loan
Agreement.
5.2 Performance. Purchaser shall fully perform and
discharge the Assumed Liabilities.
5.3 Nonassumption of Other Liabilities. Except as
specifically set forth in Section 5.1 of this Agreement,
Purchaser does not, and will not, be obligated to assume the
Industrial Revenue Bond obligations (other than as provided in
Section 5.1.4) or any other debt, obligation, liability, or duty
of Boise Cascade or Oxford of any form or nature, absolute or
contingent, known or unknown, whether incurred in connection with
its operation of the Business or otherwise. Other than the
specific obligations assumed by Purchaser pursuant to
Section 5.1.4, Boise Cascade shall fully perform and discharge
such Industrial Revenue Bonds and other obligations in accordance
with their terms. Without limiting the foregoing, Purchaser
shall not assume the liabilities set forth in Schedule 5.3.
5.4 Consents to Assignment. Boise Cascade and
Purchaser shall use their best efforts and cooperate with each
other to obtain any required consent to the assignment of the
Contracts prior to the Closing. With respect to any Contracts
other than those listed on Schedule 6.2.1, if Boise Cascade is
unable to obtain consent to the assignment prior to Closing, the
Contract in question shall be deemed an Excluded Asset and any
obligation or liability arising therefrom shall be excluded from
the Assumed Liabilities with an appropriate adjustment made to
the Closing Statements in the amount, if any, recorded on the
Closing Statements for such liability or asset. If any Contract
so excluded is an obligation of Boise Cascade to sell product
produced at the Rumford Facility, Purchaser shall enter into and
perform a subcontract with Boise Cascade pursuant to which
Purchaser will sell product to Boise Cascade on substantially the
same terms as Boise Cascade is obligated to sell or perform under
the excluded Contract. If any Contract so excluded is an
obligation of Boise Cascade to purchase inventories of raw
materials, Purchaser shall repurchase such inventories from Boise
Cascade on substantially the same terms as Boise Cascade is
obligated to purchase the inventories under the excluded
Contract.
6. Representations and Warranties of Boise Cascade. Boise
Cascade hereby represents and warrants to Purchaser as follows:
6.1 Organization and Standing. Boise Cascade is a
corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and duly qualified, in
good standing or licensed as a foreign corporation authorized to
do business in all states in which any of its assets may be
situated and where it is required to be so qualified in order to
conduct the Business as a foreign corporation. Except for
Oxford, Rumford Falls, RCC, Rumford Cogen, Androscoggin, and Gulf
Island, Boise Cascade does not own, directly or indirectly, any
capital stock of, or other equity interest in, any person or
participate in any joint venture or similar arrangement with any
person relating to the Business.
Oxford is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Delaware and duly qualified, in good standing or licensed as a
foreign corporation authorized to do business in all states in
which its ownership of any of its assets or its business
activities require such qualification or license. Except for
Rumford Falls and Androscoggin, Oxford does not, directly or
indirectly, own any capital stock of, or other equity interest
in, any person or participate in any joint venture or similar
arrangement with any person relating to the Business.
Rumford Falls is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Maine and duly qualified, in good standing or licensed as a
foreign corporation authorized to do business in all states in
which its ownership of any of its assets or its business
activities require such qualification or license. Rumford Falls
does not own any capital stock of, or other equity interest in,
any person or participate in any joint venture or similar
arrangement with any person, except that it owns 25% of the
equity of Androscoggin.
Rumford Cogen is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Delaware and duly qualified, in good standing or licensed as a
foreign corporation authorized to do business in all states in
which its ownership of any of its assets or its business
activities require such qualification or license. Rumford Cogen
does not own any capital stock of, or other equity interest in,
any person or participate in any joint venture or similar
arrangement with any person, except for a 30% interest as the
general partner in RCC.
RCC is a limited partnership duly organized, validly
existing, and in good standing under the laws of the state of
Maine and duly qualified, in good standing or authorized to do
business in all states in which its ownership of any of its
assets or its business activities require such qualification or
license.
None of the Entities is a "foreign person" within the
meaning of Section 1445(b)(2) of the Code.
6.2 Authority. Boise Cascade and Oxford currently
have, and have had at all relevant times, full corporate power
and authority to execute and deliver this Agreement and all
documents and instruments referred to herein or contemplated
hereby and to carry out the terms and conditions hereof and
thereof. Boise Cascade and Oxford have duly and lawfully taken
all corporate action necessary to authorize the execution,
delivery and performance of this Agreement and all documents and
instruments related thereto. This Agreement has been duly
executed and constitutes the valid and binding obligation of
Boise Cascade and Oxford, enforceable in accordance with its
terms and conditions except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally
and by general principles of equity (whether applied in a
proceeding at law or in equity).
6.2.1 No Default. None of the execution,
delivery and performance of this Agreement by Boise Cascade or
Oxford will constitute a violation of or a default under, or give
rise to the acceleration of rights under, any mortgage,
indenture, promissory note, contract, understanding, arrangement,
or other agreement of any kind or character, to which Boise
Cascade, Oxford, Rumford Cogen, Rumford Falls, or RCC is a party,
or by which any of them is bound (except as set forth in
Schedule 6.2.1 and further excepting any consents which, if not
obtained, would not individually or in the aggregate have a
material adverse effect on the Business), Boise Cascade's or
Oxford's charter or bylaws, or any court injunction or decree or
any valid and enforceable order of a governmental agency having
jurisdiction over Boise Cascade or Oxford. Boise Cascade and
Oxford will use their best efforts to obtain any required
approval or consent of any federal, state, county, local or other
governmental or regulatory body or any other person.
6.3 Financial.
6.3.1 Historical Balance Sheet. The
Historical Balance Sheet was prepared from the books and records
of the Business, and all such books and records were prepared and
maintained in accordance with the Historical Accounting
Procedures except for the adjustments disclosed in Schedule 1.33.
The Historical Balance Sheet presents fairly in all material
respects the financial position of such Business at June 30,
1996.
6.3.2 RCC. The financial statements of RCC,
dated December 31, 1995, which have previously been provided to
the Purchaser, have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") applied
on a consistent basis during the periods involved and fairly
present in all material respects the financial position and
results of operations and cash flows of RCC as at the date
thereof and for the period presented therein. Since such date,
there has been no material adverse change in its financial
condition, operations or properties.
6.3.3 Absence of Certain Changes. Since
July 1, 1996: (i) the Entities have conducted the operations of
the Business only in the ordinary course consistent with past
practice, (ii) there has not been a material adverse effect on
the Assets, liabilities, or physical operations of the Business
(other than as a result of changes in market conditions); and
(iii) the Entities have not taken action that if taken after the
date hereof would constitute a violation of Section 9.1 hereof.
6.4 Taxes.
6.4.1 Schedule 6.4.1 lists (i) all Tax Returns
and the jurisdiction in which such Tax Returns are filed and (ii)
all elections with respect to Taxes and any consents pursuant to
section 341(f) of the Code filed by the Entities (excluding Boise
Cascade) during 1995 relating to or attributable to the
Companies, RCC, the Assets or the Business.
6.4.2 Except as otherwise set forth on
Schedule 6.4.2:
(a) The Entities (excluding Boise Cascade) have or
will have (i) timely filed, or caused to be filed on a timely
basis, with the appropriate taxing authorities all Tax Returns
required to be filed on or before the Closing with respect to or
attributable to the Companies, the Assets, the Business or RCC
and such Tax Returns are true, correct and complete in all
material respects and (ii) paid, or caused to be paid, on a
timely basis all Taxes due and payable or established adequate
reserves in accordance with GAAP for the payment of all such
Taxes.
(b) The Entities (excluding Boise Cascade) have
not (i) received any notice of deficiency or assessment from any
taxing authorities with respect to liability for Taxes of the
Companies or otherwise attributable to or arising from the
Assets, the Business or RCC that have not been fully paid or
finally settled, (ii) requested an extension of time within which
to file any Tax Return that has not since been filed, (iii) made
any requests to any taxing authority for rulings or
determinations with respect to any Taxes of the Companies or
otherwise attributable to or relating to the Assets, the Business
or RCC which is currently pending and (iv) granted any requests,
agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment of any Taxes with
respect to any Tax Returns relating to or attributable to the
Companies, the Assets, the Business or RCC which period (after
giving effect to such extensions or waivers) has not expired.
(c) There are no ongoing audits or examinations of
any of the Tax Returns relating to or attributable to the
Companies, the Assets, the Business or RCC.
(d) None of the Entities (excluding Boise
Cascade) has received any inquiry or claim from any taxing
authority in a jurisdiction in which the Entities (excluding
Boise Cascade) do not file Tax Returns which states that the
Entities (excluding Boise Cascade) with respect to the Companies,
the Assets, the Business, or RCC are or may be subject to
taxation in such jurisdiction.
(e) There are no liens for Taxes upon any of the
Assets or any of the other properties of the Business, the
Companies or RCC other than liens for Taxes not yet due or
payable.
(f) No taxing authority is now asserting or
threatening to assert any deficiency or assessment for additional
Taxes of any of the Entities (excluding Boise Cascade) or
otherwise attributable to or relating to the Assets, the Business
or RCC, and none of the Entities have knowledge of any facts
that, if known to any taxing authority, would likely result in
the issuance of a notice of proposed deficiency or similar notice
of intention to assess Taxes of the Companies or otherwise
relating to or attributable to the Assets, the Business or RCC.
(g) There has been no change in the method of
accounting utilized with respect to RCC that would require any
adjustment to taxable income pursuant to section 481 of the Code,
and none of the Entities have knowledge that the Internal Revenue
Service has proposed any such adjustment or has proposed any such
change in accounting method.
(h) Neither Rumford Falls nor Rumford Cogen is a
party to any agreement providing for the allocation or
apportionment of any liability for Taxes, payments of Taxes or
Tax benefits or refunds.
(i) Neither Rumford Falls nor Rumford Cogen has
been a member of any affiliated, consolidated, combined or
unitary group other than one with respect to which Boise Cascade
was the common parent since 1976.
(j) No power of attorney has been granted by the
Entities (excluding Boise Cascade) to any party with respect to
any Tax matter of or relating to the Companies, the Assets, the
Business or RCC which is currently in force.
(k) The aggregate amount of Tax credits of
Rumford Falls and Rumford Cogen does not exceed $5 million.
(l) RCC has filed an election under section 754
of the Code to adjust the basis of RCC's property in the manner
provided in section 734 (in the case of a distribution of
property) and section 743 (in the case of a transfer of a
partnership interest).
(m) None of the Entities has participated in or
cooperated with an international boycott within the meaning of
section 999 of the Code.
(n) Effective as of Closing, the Entities will
not own any property that is or will be required to be treated as
being owned by another person pursuant to the provisions of
section 168(f)(8) of the Code (as in effect prior to the
amendment by TEFRA of 1982).
(o) There have not been any transfers of any of
the partnership interests in RCC within the twelve month period
immediately preceding the date of this Agreement.
6.5 Compliance with Laws; Permits. Except as noted in
Schedule 6.5, to the best of Boise Cascade and Oxford's knowledge
after due inquiry of their key managers, the Business is being,
and has been for the last three years, conducted in compliance in
all material respects with all applicable federal, state or local
laws, rules and regulations, and any court or administrative
order. Boise Cascade has all federal, state, and local
governmental licenses and permits required to conduct the
Business in the manner in which it is presently conducted, except
where the failure to have such licenses and permits will not have
a material adverse effect on the operations or financial
condition of the Business. Except for environmental permits
(which are addressed in Section 6.17.7), Schedule 6.5 lists all
licenses and permits material to the operation of the Business
and, to the best knowledge of Boise Cascade, all such permits are
valid and in full force and effect.
6.6 Litigation. Except as set forth on Schedule 6.6,
there are no outstanding orders, judgments, injunctions, awards
or decrees of any court, governmental or regulatory body or
arbitration tribunal which affect the Assets or the operation of
the Business. Schedule 6.6 sets forth all currently pending, or
to Boise Cascade's knowledge after review with the key managers
of the Business, threatened actions, investigations, suits,
claims, legal, administrative and arbitral proceedings with
respect to or arising out of the Assets or the Business.
6.7 Contracts and Agreements. Schedule 6.7 lists all
of the following for the Entities:
6.7.1 The Collective Bargaining Agreements.
6.7.2 Contracts and other agreements
(including accepted purchase orders) for the purchase or sale of
product, materials, supplies, merchandise or services for use in
the conduct of the Business except for those entered into in the
ordinary course of business and (i) which have terms expiring in
less than one year from the date of this Agreement; (ii) are
cancelable on less than 61 days' notice without penalty,
liability or premium; (iii) involve an amount of $500,000 or
less; or (iv) provide for the supply of goods or services under
Multiple Mill Purchase Agreements.
6.7.3 Railroad sidetrack agreements associated
with the Rumford Facility.
6.7.4 Trucking, delivery and service
agreements, including truck/trailer leases, or driver leases
associated with the Business except for those terminable on less
than 91 days' notice without penalty, liability or premium.
6.7.5 Contracts and other agreements for the
sale of any of the Assets, except for those not required to be
disclosed pursuant to Section 6.7.2 hereof, or for the grant to
any person of any preferential rights to purchase any of the
Assets.
6.7.6 Any joint development, joint venture or
partnership agreements relating to the Business.
6.7.7 Contracts and other agreements
containing covenants of any of the Entities not to compete in any
line of business or with any person in any geographical area or
covenants of any other person not to compete with any of the
Entities in any line of business or any geographic area which
directly affect all or any portion of the Business, excluding any
Employee Benefit Plan listed in Schedule 6.16.
6.7.8 Contracts and other agreements relating
to the acquisition of any operating business or the capital stock
of any other person, if such operating business or stock will
become part of the Assets or the Business.
6.7.9 Options or contracts for the purchase of
any fixed asset or real property for the Business, tangible or
intangible, for a purchase price of more than $250,000 per
individual item or $2,000,000 in the aggregate for all items,
exclusive of the option held by Rumford Cogen to acquire, subject
to certain conditions, the interests of the limited partners in
RCC and the option held by RCC, subject to certain conditions, to
acquire the stock of Rumford Falls.
6.7.10 Contracts and other agreements arising
out of or related to the Business requiring the payment to or by
any person of a royalty, license fee, know-how, or technical fee,
or override or similar commission or fee.
6.7.11 Guarantees by any of the Entities of any
obligation of any other person arising out of or related to the
Business.
6.7.12 Construction agreements or equipment
purchase orders or contracts relating to any capital improvements
currently being made to the Assets requiring capital in excess of
$1,000,000 per individual contract, or $5,000,000 in the
aggregate, except in either case as set forth on capital plans
previously delivered to Purchaser.
6.7.13 All employment agreements and all
consulting agreements relating to the Business excluding
consulting agreements terminable on 31 days' notice or less.
6.7.14 All leases for equipment or machinery
used in the conduct of the Business, except those entered into in
the ordinary course of business and (i) which have terms expiring
less than one year from the date of this Agreement; (ii) are
cancelable on less than 61 days' notice without penalty,
liability or premium; or (iii) involve an amount of $100,000 or
less.
6.7.15 All sales agreements of the Business
that have a remaining term of more than one year; and
6.7.16 All other contracts, agreements or
commitments relating to the Business except for those entered
into in the ordinary course of business and (i) which have terms
expiring in less than one year from the date of this Agreement;
(ii) are cancelable on less than 61 days' notice without penalty,
liability or premium; or (iii) involve an amount of $500,000 or
less.
6.7.17 At least 30 days prior to Closing, Boise
Cascade shall deliver or make available to Purchaser true and
complete copies of all of the items set forth in Schedule 6.7.
Except as set forth in Schedule 6.7.17, all of such contracts,
agreements, leases, and other items are valid, subsisting, in
full force and effect and binding upon the parties thereto in
accordance with their terms, subject to the qualifications that
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
enforcement of creditor's rights generally and by general
principles of equity (whether applied in a proceeding at law or
in equity) and that no representation is made as to the power or
authority of the counterparty of each such contract to enter into
and perform such contract in accordance with its terms. Boise
Cascade or its relevant subsidiary has satisfied in full or
provided for all of its liabilities and obligations thereunder
requiring performance prior to the date hereof in all material
respects, is not in default under any of them, nor does any
condition exist that with notice or lapse of time or both would
constitute such default.
6.8 Conditions of and Title to Personal Property.
6.8.1 Personal Property. Boise Cascade,
Oxford, Rumford Cogen, and Rumford Falls have, and as of the
Closing will have, good and marketable title to all of the
personal property reflected in the Historical Balance Sheet or
acquired after June 30, 1996 (except for personal property sold
or otherwise disposed of after June 30, 1996), free and clear of
all security interests, mortgages, pledges, liens, charges, and
encumbrances of any nature whatsoever, except for minor
imperfections of title, encumbrances, or liens as do not
materially detract from or interfere with the present use of the
property or otherwise materially impair the operation of the
Business. THE BUILDINGS, MACHINERY, AND EQUIPMENT BEING SOLD
PURSUANT TO THIS AGREEMENT (DIRECTLY AND BY VIRTUE OF TRANSFER OF
THE STOCK OF RUMFORD FALLS AND RUMFORD COGEN AND INCLUDING,
WITHOUT LIMITATION, THE ASSETS OF RCC), ARE BEING SOLD "AS IS,"
AND NEITHER BOISE CASCADE NOR OXFORD MAKES ANY WARRANTY OF ANY
KIND, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR OTHERWISE, WITH RESPECT TO ANY OF
SUCH BUILDINGS, MACHINERY, AND EQUIPMENT, EXCEPT FOR THE WARRANTY
OF TITLE HEREINABOVE SET FORTH. BOISE CASCADE AND PURCHASER
REPRESENT THAT THEY ARE ENGAGED IN THE PAPER BUSINESS AT NUMEROUS
LOCATIONS THROUGHOUT THE UNITED STATES AND ARE KNOWLEDGEABLE AND
EXPERIENCED IN THAT BUSINESS.
6.8.2 RCC. RCC has, and as of the Closing
will have, good and marketable title to all of the personal
property reflected in its financial statements or acquired after
the date thereof (except for personal property sold or otherwise
disposed of since such date), free and clear of all security
interests, mortgages, pledges, liens, charges, and encumbrances
of any nature whatsoever, except for the mortgages and security
interests granted by it to Bank of America, as agent for the
financing provided at the time of its organization and for the
mortgage and security interest granted by it to Central Maine
Power Company in connection with its execution of a long-term
agreement to sell the bulk of its power output to such firm and
for minor imperfections of title, encumbrances, or liens as do
not materially detract from or interfere with the present use of
its assets or materially impair the operation of its portion of
the Business.
6.8.3 Rumford Cogen. Rumford Cogen has no
property or assets other than its general partnership interest in
RCC and certain accounts receivable from Boise Cascade and has no
material liabilities other than its obligations under RCC's
partnership agreement and deferred tax liabilities. Upon
consummation of the transactions contemplated by this Agreement,
Purchaser will succeed to all of Boise Cascade's or Oxford's
rights, powers, liabilities, and obligations with respect to RCC
and the cogeneration project owned by RCC. Consummation of the
transactions contemplated by this Agreement will not accelerate,
augment or otherwise change the rights of any other party with
respect to RCC, including the limited partners of RCC.
6.8.4 Inventory. That portion of the
Inventory which is finished goods has been produced in the
ordinary course of business and is of a quality salable in the
ordinary course of business.
6.8.5 Accounts Receivable. The Accounts
Receivable, all other receivables shown on the Historical Balance
Sheet and all receivables acquired or generated by Boise Cascade
and Oxford since June 30, 1996 (subject to reserves for
noncollectibility as reflected in the Final Balance Sheet), are
bona fide receivables and represent amounts due with respect to
transactions entered into in the ordinary course of business. No
such account has been assigned or pledged to any other person,
firm or corporation and no defense or setoff to any such account
has been asserted by the account obligor.
6.9 Real Property.
6.9.1 Schedule. Schedules 1.46 and 1.60
identify all the owned real property included in Realty and
Timberlands. All acreages specified in such Schedules are
approximately accurate.
6.9.2 No Assessments. Boise Cascade and
Oxford have not received any written notice or communication
advising them of any material general or special assessment
relating to the Realty and/or Timberlands that is not fully paid
or which is not disclosed in a schedule to this Agreement. To
the knowledge of Boise Cascade and Oxford, there are no plans by
any governmental authority which may result in the imposition of
any special assessment relating to the Realty and/or Timberlands.
6.9.3 Ownership. Oxford and/or Boise Cascade
has good, valid, marketable, and fee simple title to those
portions of the Realty upon which the Rumford pulp and paper mill
is located, free and clear of all security interests, liens,
mortgages, encumbrances, and restrictions other than Permitted
Encumbrances and encumbrances which will be extinguished prior to
Closing. Boise Cascade and Oxford represent and warrant, and
will convey to Purchaser, only such title to the Timberlands and
the balance of the Realty as they received from their vendors,
and they further represent and warrant that they have not done or
suffered any security interests, liens, mortgages, encumbrances,
and restrictions that will continue after Closing other than
Permitted Encumbrances.
To the best knowledge of Boise Cascade, after due
inquiry of the Rumford mill manager, there is no claim of any
third party affecting the title to said portion of the Realty, or
defect in the zoning thereof, which would materially impair the
operation of the Business as it is currently conducted.
6.9.4 Use of the Real Properties. Boise
Cascade and Oxford have used the Rumford Facility in conformity
with any Certificate of Occupancy ("CO") issued for the Rumford
Facility. No proceeding is currently pending or threatened
regarding the revocation or limitation of any CO issued for the
Rumford Facility, and to Boise Cascade's knowledge, there is no
basis or grounds for any such revocation.
6.9.5 Access to the Real Properties. To the
best of Boise Cascade and Oxford's knowledge after consultation
with the Rumford mill manager, no fact or condition exists which
would prohibit adequate rights of access to and from the Rumford
Facility from and to public highways and roads, and Boise Cascade
and Oxford have not received written notice of any pending or
threatened restriction or denial, governmental or otherwise, upon
such ingress or egress which would adversely affect the operation
of the Rumford Facility. To the best knowledge of Boise Cascade,
Boise Cascade presently has adequate rights of access to the
Timberlands to permit their proper use as Timberlands.
6.9.6 No Condemnation. Neither Boise Cascade
nor Oxford has received any written notice of any pending
condemnation or eminent domain proceeding which, if successfully
prosecuted, would have a material adverse effect on the continued
use or operation of the Business.
6.9.7 Rumford Facility. Every plant,
warehouse, sales office, or other building that comprises the
Rumford Facility is located within the perimeter of the Rumford
Realty.
6.9.8 Utilities. The Realty conveyed to
Purchaser provides Purchaser with adequate access to all
utilities necessary for the operation of the Rumford Facility in
a manner substantially consistent with the manner in which it is
presently being operated.
6.9.9 Native American Claims. To the best of
Boise Cascade and Oxford's knowledge, within the past three
years, no claims have been asserted and there are no current
claims with respect to the Realty or Timberlands constituting
tribal lands.
6.10 Leased Facilities. Part I of Schedule 1.27 lists
all leased real property used by Boise Cascade or Oxford in the
Business which will be assigned to Purchaser. Part II of
Schedule 1.27 lists all leased real property held by Rumford
Cogen, Rumford Falls, and RCC. The leased real property listed
in Schedule 1.27 is all of the real property leased and used by
any of the Entities in their conduct of the Business other than
leased property used in the operation of any Joint Facility.
True, complete and correct copies of the current lease agreements
for each of the leases scheduled in Schedule 1.27 have previously
been delivered to Purchaser. The Entities enjoy peaceful
possession of all the Leased Facilities. None of the Entities
nor, to the best of Boise Cascade's knowledge, the lessor is in
default under any of the terms or conditions of any of such
leases, and there is no event which, but for the passing of time
or the giving of notice or both, would constitute an event of
default under any of such leases by the lessee or, to the best of
Boise Cascade's knowledge, the lessor. None of the Entities nor
any such lessor has commenced any action or given or received any
written notice for the purpose of terminating any of such leases.
6.11 All Necessary Assets. Except for the Excluded
Assets, all of the rights, properties and assets utilized or
required by Boise Cascade in connection with owning and operating
the Business are (i) either owned by the Entities; or
(ii) licensed or leased to the Entities under one of the
Contracts conveyed to Purchaser under this Agreement. The Assets
constitute all the assets necessary for Purchaser to conduct the
Business following the Closing in a manner substantially similar
to the manner in which it was conducted by the Entities prior to
the Closing, except for those aspects of the Business which
utilize the Excluded Assets. Neither Boise Cascade nor Oxford
has a commitment or legal obligation, absolute or contingent, to
any person other than the Purchaser to sell, assign, transfer,
lease, sublease, or effect a sale of any Assets, except in the
ordinary course of business consistent with past practice.
6.12 Intangible Rights. Part I of Schedule 1.35 sets
forth all patents, trademarks, service marks, trade names, and
all applications and licenses for any of the foregoing which are
owned by any of the Entities and used by any of them exclusively
in the Business, true and complete copies of which have been
previously delivered to Purchaser. Part II of Schedule 1.35 sets
forth all patents, trademarks, service marks, trade names, and
all applications for any of the foregoing which are owned by any
of the Entities and used by them in the Business on a
nonexclusive basis and which shall be deemed Excluded Assets.
All registrations listed in Part I of Schedule 1.35 are in full
force and effect in accordance with their terms. Except as set
forth in Schedule 1.35, no licenses, sublicenses, covenants or
agreements have been granted or entered into by Boise Cascade or
Oxford in respect of any of such trade names, trademarks, service
marks, copyrights or patents or any applications therefor. Boise
Cascade and/or Oxford is transferring all patents, trademarks,
trade names, service marks or copyrights necessary for the
conduct of the Business as presently operated, other than those
listed in Part II of Schedule 1.35. To the best knowledge of
Boise Cascade, there is not now, and has not been during the past
three years, any infringement, misuse or misappropriation by any
of the Entities of any valid patent, trademark, trade name,
service xxxx, copyright or trade secret which relates to the
Business and which is owned by any third party. There is not now
any pending or, to the best knowledge of Boise Cascade,
threatened claim of infringement, misuse or misappropriation of
any patent, trademark, trade name, service xxxx, copyright or
trade secret against any of the Entities relating to the
Business. There is no pending or threatened claim by any of the
Entities against others for infringement, misuse or
misappropriation of any patent, trademark, trade name, service
xxxx, copyright or trade secret used by the Business and owned by
the Entities.
6.13 Liabilities. There is no direct or indirect
indebtedness, liability, claim, loss, damage, deficiency,
obligation or responsibility, fixed or unfixed, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise, relating to the Business (the "Liabilities") that
either would be material to the Business taken as a whole or that
would be required pursuant to Historical Accounting Procedures to
be reflected on the Historical Balance Sheet and that is not
reflected on the Historical Balance Sheet, except for liabilities
and obligations of RCC, all of which are disclosed in the
financial statements of RCC to the extent required by GAAP.
Since the date of the Historical Balance Sheet, none of Boise
Cascade, Oxford, Rumford Falls or Rumford Cogen has incurred any
Liabilities that would be required pursuant to Historical
Accounting Procedures to be reflected on or reserved against in
any of their balance sheets or that would be material to the
Business taken as a whole, except for Liabilities incurred in the
ordinary course of business consistent with past practice and in
accordance with Section 9.1. None of the liabilities of RCC,
Androscoggin, or Gulf Island are recorded on the Historical
Balance Sheet because such entities are not accounted for on a
consolidated basis with the balance sheet of Boise Cascade and
its subsidiaries or affiliates. Boise Cascade, Rumford Falls,
and/or Oxford, as appropriate, have recorded in their financial
statements all liabilities and obligations arising out of the
ownership of an interest in Androscoggin and Gulf Island in
accordance with and to the extent required by Historical
Accounting Procedures. Except as set forth in Schedule 6.13,
neither Boise Cascade, Oxford, Rumford Falls, nor Rumford Cogen
have any Liabilities arising out of or connected with the
Business other than:
6.13.1 Liabilities fully and adequately
reflected or reserved on the Historical Balance Sheet in
accordance with Historical Accounting Procedures;
6.13.2 Liabilities incurred since June 30,
1996, in the ordinary course of business in accordance with
Section 9.1;
6.13.3 Liabilities and obligations not required
by Historical Accounting Procedures to be reflected or reserved
against in the Historical Balance Sheet; and
6.13.4 Liabilities and obligations arising out
of the Industrial Revenue Bonds.
6.14 Employee Relations.
6.14.1 Labor Relations. (a) Except to the
extent set forth in Schedule 6.14.1, (i) there is no labor
strike, dispute, slowdown, stoppage or lockout actually pending,
or to the knowledge of Boise Cascade, threatened against or
affecting the Business and during the past three years there has
not been any such action; (ii) Boise Cascade has provided to
Purchaser, or will provide prior to Closing, copies of all
current published personnel policies, rules or procedures
applicable to employees of the Business; (iii) to Boise Cascade's
knowledge, the Business has for the last three years been in
compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational
safety and health, and is not engaged in any unfair labor
practices as defined in the National Labor Relations Act or other
applicable law, ordinance or regulation; (iv) to the knowledge of
Boise Cascade, there is no unfair labor practice charge or
complaint against the Business pending or threatened before the
National Labor Relations Board or any similar state or foreign
agency; (v) there is no grievance arising out of any collective
bargaining agreement or other grievance procedure; (vi) to the
knowledge of Boise Cascade, no charges with respect to or
relating to the Business are pending before the Equal Employment
Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices; (vii) Boise Cascade
has not received notice of the intent of any federal, state, or
local agency responsible for the enforcement of labor or
employment laws to conduct an investigation with respect to or
relating to the Business and no such investigation is in
progress; and (viii) to the knowledge of Boise Cascade after
consultation with the key managers of the Rumford Facility, there
are no complaints, lawsuits or other proceedings pending or
threatened in any forum by or on behalf of any present or former
employee of the Business, any applicant for employment or classes
of the foregoing alleging breach of any express or implied
contract or employment, any law or regulation governing
employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment
relationship.
(b) Since the enactment of the Worker Adjustment
and Retraining Notification Act (the "WARN Act"), Boise Cascade
has not effectuated (i) a "plant closing" (as defined in the WARN
Act) affecting any site of employment or one or more Facilities
or operating units within any site of employment or Facility of
the Business; or (ii) a "mass layoff" (as defined in the WARN
Act) affecting any site of employment or Facility of the
Business; nor has the Business been involved in any transaction
or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state or local law.
No Employee has suffered an "employment loss" (as defined in the
WARN Act) in the past six (6) months.
6.14.2 Employees. Boise Cascade has separately
provided a list of the names, social security numbers, dates of
hire, locations of employment, and dates of birth of each
Employee. The list is a true, correct, and complete schedule of
such information as of the date hereof and will be updated to
provide a true, correct, and complete schedule of such
information as of the date of Closing. None of Oxford, Rumford
Falls, Rumford Cogen, or RCC have employees because all labor and
management services required by such companies are provided by
Boise Cascade under management agreements.
6.15 Products and Services. There are no orders or
decrees of any court or governmental or regulatory body by which
any of the Entities are bound and there are no statements,
citations or decisions by any governmental or regulatory body to
the effect that any product or service manufactured, marketed,
distributed, or provided at any time by any of the Entities with
the Assets is defective or fails to meet in any material respect
any standards promulgated by any such governmental or regulatory
body. There have been no recalls ordered by any such
governmental or regulatory body with respect to any product
manufactured or distributed by any of the Entities in the course
of its operation of the Business. Schedule 6.15 sets forth any
pending (i) product warranty claims or causes of action where the
amount claimed exceeds $50,000 and (ii) product liability claims
or causes of action alleging personal injury or property damage
resulting from products or materials sold by the Business.
6.16 Employee Benefit Plans. Schedule 6.16 contains a
true and complete list of all employee benefit plans ("Employee
Benefit Plans") maintained by Boise Cascade which are applicable
to the Employees. Boise Cascade has complied in all material
respects with the requirements of the Employee Retirement Income
Security Act of 1974 ("ERISA") and the Code as they apply to such
plans. No "party in interest" or "disqualified person" has
engaged in a "prohibited transaction" with such plans within the
meaning of Section 406 of ERISA or Section 4975 of the Code. All
contributions required by law or the terms thereof with respect
to the Employee Benefit Plans have been made. There exists no
encumbrance upon any of the Assets and no obligation among the
Assumed Liabilities that is attributable to the establishment or
operation of such Employee Benefit Plans.
6.17 Environmental Matters.
6.17.1 Purchaser acknowledges that Oxford
acquired the Rumford Facility in 1976 from a previous operator of
the Business. All of the representations and warranties
contained in this Section 6.17 made by any of the Entities are
limited to the period of time from the date in 1976 when Oxford
acquired the Rumford Mill until the date of the Closing (the
"Operating Period"), provided, however, that Boise Cascade will
disclose, without accepting any liability to Purchaser, any
information or knowledge it has with respect to environmental
matters occurring prior to the Operating Period. Notwithstanding
anything to the contrary contained herein, the representations
and warranties set forth in this Section 6.17 shall not apply to
contamination of any of the Realty or Timberlands caused by
adjoining landowners provided, however, that Boise Cascade will
disclose, without accepting any liability to Purchaser, any
information or knowledge it has with respect to contamination of
the Realty or Timberlands from adjoining landowners.
6.17.2 Except as set forth in Schedule 6.17,
none of the Entities have in connection with their operation of
the Business or their ownership and use of the Assets
transported, stored, treated or disposed of, nor have they
allowed or arranged for any third person to transport, store,
treat or dispose of, Hazardous Material to or at any location
other than a site lawfully permitted at the time to receive such
Hazardous Material for such purposes, nor have they performed,
arranged for or allowed by any method or procedure such
transportation, storage, treatment or disposal in contravention
of any Environmental Laws in force at that time.
6.17.3 Except as set forth in Schedule 6.17,
none of the Entities have in connection with their operation of
the Business or their ownership and use of the Assets used,
generated, treated, stored or disposed of Hazardous Materials
which resulted in a Release thereof on, into, or beneath the
surface of the Assets, except for inventories of such substances
to be used, and wastes generated therefrom, in the ordinary
course of business of Boise Cascade, which inventories and
wastes, if any, were and are stored or disposed of in accordance
with applicable laws and regulations, and except for any Release
from which the Hazardous Materials have been removed. Except as
set forth in Schedule 6.17, except for any Release from which the
Hazardous Materials have been removed, and except in compliance
with Environmental Laws and permit terms, there has not occurred,
nor is there presently occurring in the operations of the
Business or use of the Assets, a Release of any Hazardous
Material on, into, or beneath the surface of the Assets, and no
part of the Assets, including the groundwater located thereon,
is, to the best knowledge of Boise Cascade, presently
contaminated by Hazardous Materials.
6.17.4 Except as set forth in Schedule 6.17, to
the knowledge of Boise Cascade, none of the Entities have
transported or disposed of, nor, to the actual knowledge of Boise
Cascade, have any of the Entities allowed, or arranged for any
third parties to transport or dispose of, in the conduct of the
Business, any Hazardous Materials to or at a site which pursuant
to CERCLA or any similar state law has been placed on the
CERCLIS, the National Priorities List, or their state
equivalents, or which the United States Environmental Protection
Agency or the relevant state agency has proposed or is proposing
to place on the CERCLIS, the National Priorities List, or their
state equivalents (hereinafter collectively referred to as a
"Site"). Except as set forth in Schedule 6.17, none of the
Entities have received notice that they are a potentially
responsible party for a federal or state environmental cleanup
site arising from or relating to the Business or the Assets or
any Site under any Environmental Law. Except as set forth in
Schedule 6.17, none of the Entities have received any written or
oral request for information in connection with any federal or
state Site arising from or relating to the Business or the Assets
nor have any of the Entities undertaken (or been requested to
undertake) any response, remedial, or cleanup action of any kind
arising from or relating to the Business at the request of any
federal, state or local government entity, or at the request of
any other person or entity.
6.17.5 Except as identified in Schedule 6.17,
there are no Underground Storage Tanks, asbestos containing
materials, or regulated PCB capacitors and transformers in any or
on any Asset. For purposes of this Section 6.17.5, the term
"Underground Storage Tanks" shall have the meaning given it in
the Solid Waste Disposal Act, 42 U.S.C. Section 6991, et seq., and the
applicable state law or regulation.
6.17.6 Schedule 6.17 identifies (i) all
environmental audits, assessments, or occupational health studies
(other than routine safety surveys of job sites) undertaken by
Boise Cascade with respect to the Business or the Assets within
the past three years; (ii) the results of any groundwater, soil
or air monitoring undertaken with respect to any Facility within
the past three years other than routine sampling and analysis
required by license or permit; (iii) all citations issued with
respect to the Business or the Assets within the past three years
under the Occupational Safety and Health Act of 1970; and (iv)
all claims, liabilities, litigation, notices of violation,
administrative enforcement proceedings, whether pending or
threatened, or judgment or enforcement orders issued with respect
to the Business or the Assets within the past three years or
currently outstanding under the applicable Environmental Laws.
6.17.7 All permits, licenses and authorizations
held by Boise Cascade and Oxford required by applicable
Environmental Laws are listed on Schedule 6.17, and to the
knowledge of Boise Cascade, all such permits, licenses and
authorizations are valid and in full force and effect. With
respect to the Business, Boise Cascade and Oxford are currently
in compliance in all material respects with all applicable
Environmental Laws, including without limitation, obtaining and
maintaining in effect all permits, licenses, or other
authorizations required by applicable Environmental Laws, and
Boise Cascade and Oxford are currently in compliance with all
such permits, licenses and authorizations.
6.17.8 Except as set forth on Schedule 6.17,
Boise Cascade has not entered into any agreement with respect to
the Assets that may require it to pay to, reimburse, guarantee,
pledge, defend, indemnify or hold harmless any person for or
against any Environmental Liabilities and Costs.
6.17.9 Boise Cascade has not been notified that
its operation or use of the Assets has resulted in the "taking"
of any endangered or threatened species or the adverse
modification of "critical habitat" of an endangered or threatened
species as those terms are defined under the Endangered Species
Act, 16 U.S.C. Section 1531, et seq., or similar state statutes
applicable to the Timberlands.
6.17.10 Purchaser, at its sole cost and expense,
shall have the right prior to the Closing to conduct a Phase I
environmental assessment (the "Phase I Environmental Assessment")
commencing after the execution of this Agreement, and where it
has reasonable grounds to believe that there is contamination of
the soil or groundwater by Hazardous Materials, which
contamination has not been investigated by Boise Cascade, a Phase
II environmental assessment (the "Phase II Environmental
Assessment," and together with the Phase I Environmental
Assessment, the "Environmental Assessment"). In the event of a
Phase II Assessment, Boise Cascade shall be accorded the right to
provide comments on the design of such Phase II Assessment and to
collect split samples of soil or groundwater during such Phase II
Assessment. Purchaser shall deliver a copy of its Phase I and
Phase II reports to Boise Cascade.
6.18 Rumford Cogen; RCC.
6.18.1 No Utility Status. Pursuant to Sections
292.202(n) and 292.206(c)(i) of the Federal Energy Regulatory
Commission's ("FERC") regulations, and Rule 5 under the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"), the
general partnership interest of Rumford Cogen in RCC is not
considered to be an interest of an "electric utility" as defined
in Section 3(22) of the Federal Power Act, as amended ("FPA"), or
an "electric utility holding company" as defined in Section
292.202(n) of FERC's regulations, or any combination thereof.
Neither Boise Cascade nor Oxford are (i) subject to regulation
under PUHCA, (ii) subject to regulation under the FPA other than
as contemplated by Section 3(18)(A) of the FPA and 18 CFR Section
292.601(c) or (iii) subject to regulation as an "electric
utility," "electric corporation," "electrical company," "public
utility," "holding company," "public utility holding company" or
"public service corporation" or the equivalent under any existing
law, rule, regulation, order or interpretation of any
governmental authority.
6.18.2 Project Documents. Schedule 6.18.2 is a
complete and correct list of all agreements and instruments to
which either Rumford Cogen or RCC is a party or by which Rumford
Cogen, RCC or their respective assets is bound. Neither Rumford
Cogen nor RCC is in default under or with respect to any such
agreement, and except as disclosed in Schedule 6.18.2, the
consummation of the transactions contemplated by this Agreement
will not give rise to the acceleration of rights under any of
such agreements.
6.18.3 Qualifying Facility. The cogeneration
project as owned and operated by RCC meets all requirements for a
"qualifying cogeneration facility" under PURPA, the FERC
regulations implemented thereunder and all administrative and
judicial precedents relating thereto, including without
limitation all requirements as to utility ownership, operating
and efficiency standards and useful thermal output.
7. Representations and Warranties of Purchaser. Purchaser
hereby represents, warrants, and covenants to Boise Cascade as
follows:
7.1 Purchaser Organization and Standing. Purchaser is
a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware and, prior to
Closing, or as promptly as practical thereafter, will be duly
qualified, in good standing or licensed as a foreign corporation
authorized to do business in all states in which any of the
Assets may be situated, and where it is required to be so
qualified in order to conduct the activities currently carried on
by the Entities with such assets. Purchaser is not a "foreign
person" within the meaning of Section 1445(b)(2) of the Code.
7.2 Purchaser Parent Organization and Standing.
Purchaser Parent is a corporation duly organized, validly
existing, and in good standing under the laws of the state of
Ohio, and is duly qualified, in good standing, or licensed as a
foreign corporation authorized to do business in all states in
which such qualification or licensing is required by reason of
its execution, delivery, and performance of this Agreement.
Purchaser Parent is not a "foreign person" within the meaning of
Section 1445(b)(2) of the Code.
7.3 Authority. Purchaser and Purchaser Parent each
have full corporate power and authority to execute and deliver
this Agreement and all documents and instruments required of them
by the terms hereof and to carry out the terms and conditions
hereof and thereof. Purchaser and Purchaser Parent have taken
all corporate action necessary to authorize their respective
execution, delivery, and performance of this Agreement and all
related documents and instruments. This Agreement has been duly
executed and constitutes a valid and binding obligation of each
of Purchaser and Purchaser Parent, enforceable in accordance with
its terms and conditions except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (whether applied in
a proceeding at law or in equity).
7.4 No Default or Consents. Except as set forth in
Schedule 7.4, none of the execution, delivery and performance of
this Agreement by either of Purchaser or Purchaser Parent will
constitute a violation or default or give rise to the
acceleration of rights under any mortgage, indenture, promissory
note, contract, understanding, arrangement, or other agreement of
any kind or character to which Purchaser or Purchaser Parent is a
party, or by which either of them are bound, or their respective
charter or bylaws, any court injunction or decree or any valid
and enforceable order of a governmental agency having
jurisdiction over Purchaser or Purchaser Parent. No approval or
consent of any foreign, federal, state, county, local or other
governmental or regulatory body (except as otherwise specified in
Schedule 7.4) is required in connection with the execution and
delivery by Purchaser or Purchaser Parent of this Agreement and
the consummation and performance by either of them of the
transactions contemplated hereby.
7.5 Condition of Assets. Subject to Section 9.2
hereof, Purchaser and Purchaser Parent acknowledge and agree that
Purchaser is acquiring the tangible personal property included in
the Assets in AS IS and WHERE IS physical condition. Nothing
contained in this Section 7.5 shall limit, restrict or modify any
of the warranties and representations made by Boise Cascade to
Purchaser in Section 6 hereof.
8. Real Property.
8.1 Mill Property. Title to the Realty which
constitutes the principal property of the Rumford Facility will
be conveyed to the Purchaser by a full warranty deed, subject to
Permitted Encumbrances as defined in Section 8.3 below.
8.2 Other Property. Title to the Timberlands and that
portion of the Realty not covered by Section 8.1 shall be
conveyed by a Quitclaim Deed with Covenant against grantor's acts
in Maine, a Quitclaim Deed against grantor's acts in
New Hampshire, and a Limited Warranty Deed against grantor's acts
in Vermont, subject to Permitted Encumbrances.
8.3 Permitted Encumbrances. The term "Permitted
Encumbrances " means (i) all easements, conditions, mineral
interests, restrictions, and agreements of record; (ii) liens for
state and local property taxes, water charges, sewer rents, and
other taxes and assessments, which are not delinquent or subject
to penalty; and (iii) such minor encumbrances or imperfections of
title, if any, which are not substantial in nature or amount and
which do not distract from the value of the Realty or Timberlands
as presently used or impair the operations of the Business
conducted thereon.
8.4 Imperfections. After the Closing, Boise Cascade
shall cooperate with Purchaser to clear any imperfections of
title to the Realty and Timberlands.
9. Covenants of Boise Cascade.
9.1 Operations. Except as set forth in Schedule 9.1 or
as expressly contemplated by this Agreement, with respect to the
Business, and from the date hereof through the Closing, none of
the Entities shall, without the prior consent of Purchaser, which
consent shall not be unreasonably withheld or delayed:
9.1.1 Enter into, amend or terminate an
employment agreement with any Employee; or adopt, enter into or
amend any employee benefit plan which materially affects the
Business;
9.1.2 Knowingly waive any right of material
value to the Business;
9.1.3 Make any change in the application of
the Historical Accounting Procedures or GAAP;
9.1.4 Make or revoke any tax election or
settle or compromise any tax liability or change (or make a
request to any taxing authority to change) any aspect of the
method of accounting for tax purposes utilized by any of the
Entities relating to or otherwise attributable to the Companies
and RCC;
9.1.5 Other than in the ordinary course of its
conduct of the Business, make any wage or salary increase or
bonus, or increase in any other direct or indirect compensation,
for or to any of its Employees or any accrual for or commitment
or agreement to make or pay the same;
9.1.6 Other than in the ordinary course of its
conduct of the Business, (i) enter into any lease (as lessor or
lessee), or sell, abandon or make any other disposition of any of
the Assets, except for disposition of Equipment which, due to its
age, physical condition or obsolescence, is no longer used or
useful to the Business in which it was used and which does not in
the aggregate have a book value, net of depreciation, in excess
of $250,000; or (ii) grant any lien, mortgage, security interest
or other encumbrance on any of the Assets;
9.1.7 Incur in connection with its operation
of the Business or assume in connection therewith, any debt,
obligation or liability (whether absolute or contingent or
whether or not currently due and payable) except for current
liabilities incurred in the ordinary course of Business and the
prepayment of portions thereof;
9.1.8 Except for Inventory and Equipment
acquired in the ordinary course of the conduct of the Business,
make, in connection with its operation of the Business, any
acquisition of all or any part of the assets, properties, capital
stock or business of any other person;
9.1.9 Pay, directly or indirectly, any of the
material liabilities arising out of or connected with the
Business except for payment otherwise in the ordinary course of
their conduct of the Business;
9.1.10 Terminate or fail to renew any Contract
or other agreement that is or was of a nature required to be
disclosed on Schedule 6.7 where such Contract or other agreement
may be terminated or renewed unilaterally by Boise Cascade;
9.1.11 In connection with their operation of
the Business, enter into, or become obligated under any lease,
contract, agreement or commitment except for those that have a
term of less than one year or are cancelable on less than
61 days' notice without penalty, liability or premium and involve
an amount of $250,000 or less; or
9.1.12 Hire or terminate any key managers of
the Business with a salary range of 116 or above.
9.2 Corporate Examinations and Investigations. Prior
to the Closing, Purchaser and its employees and representatives
shall be permitted, upon prior notice to Xxxx Xxxxxxxx, to make
such investigation of the assets, properties, business and
operations relating to the Business and such examination of the
books, records, returns, and financial statements relating to the
Business, as Purchaser may reasonably request. Any such
investigation and examination shall be conducted at reasonable
times and under reasonable circumstances, and Boise Cascade shall
cooperate fully therein. In order that Purchaser may have full
opportunity to make such a business, accounting and legal review,
examination, or investigation as it may wish of the Business and
of the Assets, Boise Cascade shall furnish the representatives of
Purchaser during such period with all such information and copies
of documents concerning the Business as such representatives may
reasonably request, and shall cause the officers, employees,
consultants, agents, accountants, and attorneys of Boise Cascade
to cooperate fully with such representatives in connection with
such review and examination. In the event this transaction is
not completed for any reason, Purchaser shall continue to be
subject to the confidentiality obligations set forth in a Letter
Agreement dated July 24, 1996, between Purchaser and Boise
Cascade.
9.3 Permits, Consents, and Approvals. Boise Cascade
shall cooperate with Purchaser to obtain all permits, consents,
and approvals from any governmental or regulatory body or any
other person where required for the consummation of the Closing
and the transactions contemplated hereby and the continuance in
full force and effect of the contracts and other agreements set
forth on any schedule to this Agreement. Boise Cascade shall
render such assistance to Purchaser as may be necessary and
reasonable to obtain any such consents, permits, or approvals,
provided, however, that such assistance shall not include the
payment of monies or consent to material modifications of the
terms of any permit, license, contract, or agreement. Boise
Cascade shall use its best efforts to cause the UPIU and IBEW to
consent to the assumption of the Collective Bargaining Agreements
by Purchaser without any changes, provided that such efforts
shall not require the payment of any monies to the UPIU or IBEW
or their respective members or agreement to any change in the
terms of the Collective Bargaining Agreements.
9.4 Accounts Receivable Lock Box. Boise Cascade shall
make appropriate lockbox arrangements in order that any payments
received after the Closing with respect to the Accounts
Receivable are promptly remitted to the Purchaser.
9.5 Antitrust Approvals. Boise Cascade will promptly
make any filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). Boise
Cascade will use its best efforts to supply information to any
federal, state or foreign agency reviewing the transactions
contemplated by this Agreement under the HSR Act or any
applicable state or foreign antitrust law, and to persuade any
such agency not to challenge such transactions (it being
understood that Boise Cascade shall not be required to enter into
any consent decree or similar order). In the event that any
federal, state or foreign agency takes action to enjoin such
transactions under applicable antitrust laws, Boise Cascade
agrees to diligently litigate in good faith against any such
action until the entry of a preliminary injunction or other final
order enjoining the completion of the transactions contemplated
hereunder. Boise Cascade will bear its own costs of defending
against any action by a federal, state or foreign antitrust
agency.
9.6 Disclosure Schedule Supplements.
9.6.1 The parties acknowledge that Boise
Cascade may not have completed the Schedules to this Agreement
prior to executing this Agreement. Accordingly, Boise Cascade
shall have the right from time to time prior to the Closing to
supplement any Schedule with respect to any matter hereafter
arising which, if existing or known as of the date of this
Agreement, would have been required to be set forth or described
in such disclosure schedule; provided, however, that Boise
Cascade shall complete the Schedules as promptly as practicable
after the date hereof. Any such supplemental disclosure made in
accordance with this Section 9.6 will be deemed to have cured any
breach of any representation or warranty made in this Agreement,
and will be deemed to have been disclosed as of the date of this
Agreement for purposes of determining whether or not the
conditions set forth in Section 15 hereof have been satisfied.
9.6.2 Notwithstanding Section 9.6.1 hereof, if
in the good faith judgment of the Purchaser, the supplements or
amendments to the Schedules, individually or in the aggregate,
materially and adversely affect either (i) the value of the
Business or (ii) the Purchaser's ability to operate the Business
substantially as it has been operated by Boise Cascade, and such
affect is greater than $10 million, then in such event, the
parties shall negotiate in good faith for a period of 30 days in
respect of an adjustment in the Purchase Price, and if the
parties are unable to reach agreement on such an adjustment, the
parties shall jointly retain an arbitrator to act as a binding
arbitrator of such dispute. The results of such arbitration
shall be final and binding upon the parties provided however,
that (i) if the arbitration award is less than $10 million, there
shall be no adjustment to the Purchase Price; (ii) if the
arbitrator's award is greater than $10 million and less than $40
million, the Purchase Price adjustment shall be the amount of the
arbitration award less $10 million; (iii) if the arbitrator's
award is greater than $40 million, Boise Cascade may at its
option terminate this Agreement, subject to the right of
Purchaser to limit the reduction in the Purchase Price to $30
million and continue this Agreement in force.
9.6.3 The arbitrator shall be Jaako-Pory if the
dispute involves a question of the Purchaser's ability to operate
the Business, and shall be Xxxxxxx Xxxxx & Co. if the dispute
involves the value of the Business. If Jaako-Pory or Xxxxxxx
Sachs refuses to serve as an arbitrator, the parties shall select
a replacement. If the parties cannot agree on a replacement
arbitrator, the arbitrator refusing to serve shall be requested
to select a replacement arbitrator. The parties shall share
equally the cost of the arbitrator.
10. Covenants of Purchaser.
10.1 Permits, Consents, and Approvals. Purchaser shall
use its best efforts (which shall not include the payment of any
monies outside the ordinary course) to obtain all permits,
consents, and approvals from any governmental or regulatory body
or any other person where required for the consummation of the
Closing and the transactions contemplated hereby and shall
execute such documents as are reasonable to transfer and assume
such obligations. Purchaser shall use its best efforts to cause
the UPIU and IBEW to consent to the assumption of the Collective
Bargaining Agreements by Purchaser without any changes, provided
that such efforts shall not require the payment of any monies to
the UPIU or IBEW or their respective members or agreement to any
change in the terms of the Collective Bargaining Agreements.
10.2 Antitrust Approvals. Purchaser will promptly make any
filings required under the HSR Act. Purchaser will use its best
efforts to supply information to any federal, state or foreign
agency reviewing the transactions contemplated by this Agreement
under the HSR Act or any applicable state or foreign antitrust
law, and to persuade any such agency not to challenge such
transactions (it being understood that the Purchaser shall not be
required to enter into any consent decree or similar order). In
the event that any federal, state or foreign agency takes action
to enjoin such transactions under applicable antitrust laws,
Purchaser agrees to diligently litigate in good faith against any
such action until the entry of a preliminary injunction or other
final order enjoining the completion of the transactions
contemplated hereunder. Purchaser will bear its own costs of
defending against any action by a federal, state or foreign
antitrust agency.
11. Employees.
11.1 Transfer of Employees. As of 11:59 p.m., Eastern
standard time, on the day immediately preceding Closing, Boise
Cascade shall terminate its employment of all of the Employees.
With respect to each Employee terminated by Boise Cascade, Boise
Cascade shall be responsible for payment when due of all
salaries, wages, commissions and bonuses earned up to Closing.
In accordance with Boise Cascade's "Termination of Employment"
policy, Boise Cascade shall not be obligated to pay any severance
benefits to any such terminated Employee who is offered
employment by Purchaser, provided, however, that Boise Cascade
shall be responsible for any claims for severance benefits by
Employees arising as a result of any termination of employment
occurring on or prior to the Closing. Boise Cascade shall
reimburse the Employees for all travel expenses and other
business-related expenses arising prior to Closing and for which
they are properly entitled to reimbursement from Boise Cascade.
Purchaser shall honor the number of days of 1996 and 1997 paid
vacation which is unused as of Closing, and to which each
Employee hired by Purchaser is entitled pursuant to (a) Boise
Cascade's vacation policy for salaried employees as reflected in
Schedule 11.1, or (b) any Collective Bargaining Agreement
applicable to such Employee. For purposes of determining the
amount of vacation to which Employees are entitled, Purchaser
shall treat each Employee's Service (as defined below) with Boise
Cascade as service with Purchaser.
11.2 Obligation to Hire. Effective 12:00 a.m., Eastern
standard time, on the day of Closing, Purchaser shall offer
employment to each of the Employees terminated by Boise Cascade
pursuant to Section 11.1. Neither Boise Cascade nor Purchaser
shall be obligated to pay severance pay to any Employee who
rejects Purchaser's offer of employment. Purchaser shall pay and
provide wages and benefits to all bargaining unit employees of
the Business who accept employment with Purchaser and commence
such employment on the day of Closing (the "Transferred Hourly
Employees") in accordance with the terms of the applicable
Collective Bargaining Agreement. All salaried employees of the
Business who accept employment with Purchaser and commence such
employment as of Closing (the "Transferred Salaried Employees"
and, together with the Transferred Hourly Employees, the
"Transferred Employees") will be included in Purchaser's benefits
plans applicable to such Employees and will be subject to
Purchaser's employment policies. Purchaser shall credit
Transferred Salaried Employees and, assuming Purchaser's ability
to assume the Collective Bargaining Agreements as contemplated by
Section 10.1, Transferred Hourly Employees with their service
with Boise Cascade, and its predecessors for whom service is
treated as service with Boise Cascade under Boise Cascade's
policies (collectively "Service"), as though it had been service
with the Purchaser for purposes of benefit amount, vesting, and
eligibility under Purchaser's benefit plans and policies,
provided that Purchaser shall have the right to offset the
benefit amount so provided under Purchaser's pension plans by the
amount of the benefit payable to each such Transferred Employee
under the respective Boise Cascade pension plan, provided that in
no event shall the amount of any such offset cause any
Transferred Employee to fail to accrue a benefit payable under
Purchaser's plans from and after the Closing. Boise Cascade
shall treat the transactions contemplated by this Agreement as a
"partial termination" (within the meaning of Section 411 of the
Code) with respect to the Transferred Employees for purposes of
any plan of Boise Cascade that is intended to be qualified under
Section 401(a) of the Code. Purchaser shall provide coverage
under its employee benefit plans to Transferred Employees without
requiring satisfaction of waiting periods, evidence of
insurability, and similar terms and conditions applicable to
participants in such plans, as though Transferred Employees had
been employees of Purchaser covered by Purchaser's plans during
the period of Boise Cascade Service.
11.3 Severance. All Transferred Salaried Employees who
accept employment with Purchaser and are subsequently terminated
by Purchaser shall receive the severance benefits from Purchaser,
if any, to which they may be entitled under Purchaser's then
existing severance policies applicable to Purchaser's employees
who are similarly situated provided, however, that Purchaser
shall credit the Service the Employee has with both Boise Cascade
and Purchaser in the application of such policies.
11.4 Workers' Compensation, Medical Claims and
Retirees.
11.4.1 Purchaser shall assume all liabilities
arising from workers compensation claims, whether characterized
as medical or indemnity, or arising under any other similar
government-mandated programs which are based on injuries incurred
by Employees or former employees in connection with the Business,
without regard to the date of occurrence of the injury or
injuries giving rise to the workers' compensation claim;
provided, however, that Purchaser does not assume any liability
for claims other than workers' compensation claims related to
such injuries.
11.4.2 Boise Cascade shall remain solely
responsible in accordance with its employee welfare benefit plans
for the satisfaction of all claims regardless of when filed
(subject to claim filing requirements of such plans), for (i)
medical, dental, and vision benefits claims which relate to
services provided to Transferred Employees prior to Closing, and
(ii) life insurance, accident or disability benefits (other than
workers' compensation benefits) claims which relate to events or
injuries incurred prior to Closing. Upon Closing, Purchaser
shall adopt plans for the remainder of the 1996 calendar year
providing medical, dental, and vision benefits substantially
identical to those provided by Boise Cascade, and shall give
effect under such plans to benefit elections, contributions,
copayments, and deductibles of Transferred Employees for the 1996
plan year. Boise Cascade shall provide claims administration
services for such plans in accordance with Section 23 hereof.
Subject to the approval of the carriers, Purchaser shall also
continue in full force and effect through December 31, 1996, the
programs of group term life insurance (employee and dependent),
accidental death and dismemberment insurance (employee and
dependent), accident and sickness insurance, and long-term
disability insurance covering Transferred Employees.
11.4.3 As of Closing, with respect to former
and retired employees of the Business who had terminated
employment or retired on or prior to Closing, Boise Cascade shall
be liable for all liabilities and obligations in connection with
claims for benefits brought by or in respect of such former or
retired employees of the Business under any of Boise Cascade's
pension and/or welfare benefit plans, including, but not limited
to, such liabilities with respect to medical, dental, life
insurance, health, accident or disability benefits, but excluding
any claims for or relating to workers' compensation benefits.
Boise Cascade will provide eligibility for coverage under
provisions of the Consolidated Omnibus Budget Reconciliation Act
("COBRA") to employees who terminate employment with Boise
Cascade prior to 11:59 p.m. on the day immediately preceding
Closing, and will continue coverage for employees currently on
COBRA coverage or eligible to elect such coverage as of Closing.
Purchaser will be solely responsible for complying with all
employer responsibilities under COBRA after Closing with respect
to all Transferred Employees.
11.5 No Third-Party Beneficiary. This Agreement is
being entered into solely for the benefit of the parties hereto,
and the parties do not intend that any Employee or any other
person shall be a third-party beneficiary of the covenants by
either Boise Cascade or Purchaser contained in this Agreement.
11.6 Workers Adjustment and Retraining Act ("WARN").
Purchaser shall indemnify and hold Boise Cascade harmless from
and against any and all liabilities, claims and losses (including
attorney's fees, court costs, and other litigation expenses)
arising under WARN Act or any state version of WARN Act by reason
of Purchaser's shutdown of any Facility or layoff of over
50 Employees which occurs after the Closing.
11.7 Flexible Spending Account Plans. Prior to
Closing, Boise Cascade will amend the Boise Cascade Health Care
Flexible Spending Account Plan and the Boise Cascade Dependent
Day Care Flexible Spending Account Plan (collectively, the "Flex
Plans"), to create new plans covering only the Transferred
Employees ("New Plans"), and Purchaser shall adopt such New Plans
and continue them in full force and effect through December 31,
1996. Boise Cascade shall provide claims administration services
for such New Plans in accordance with the transition services
agreement described in Section 23 hereof. The Purchase Price
shall be adjusted by an amount equal to (x) the total liability
for benefits under such New Plans adopted by Purchaser, less (y)
the sum of (i) the amount of Transferred Employees' Salary
Reduction Elections under such New Plans to be effective during
the remaining calendar year after the date of Closing, plus (ii)
the total amount of benefits Boise Cascade has paid (or is
obligated to pay) under such New Plans up to and including the
date of Closing. The amounts treated as either employer or
employee contributions with respect to the Flex Plan made prior
to or on the date of Closing will not constitute "plan assets" as
that term is defined in ERISA and regulations thereunder, and no
amounts with respect to either employee or employer contributions
under the Flex Plans have ever been held in trust for the benefit
of participants in the Flex Plans.
11.8 Incentive Plans. Purchaser will continue in full
force and effect Boise Cascade's Incentive Plan for Hourly and
certain Salaried Employees at the Rumford Facility (the "Gain
Sharing Plan") for at least the duration of the 1996 calendar
year, and shall assume all Boise Cascade's obligations with
respect to the Gain Sharing Plan, a copy of which is set forth in
Schedule 11.8. Boise Cascade will make payments to the extent
any are earned, prorated through the Closing date, in accordance
with the terms of other incentive compensation plans applicable
to Transferred Employees as though the Transferred Employees were
employed by Boise Cascade through December 31, 1996.
11.9 Non-solicitation of Employees. For a period of
two years following the Closing, Boise Cascade shall not solicit
any Employee for employment without the prior consent of
Purchaser.
12. Tax Matters.
12.1 Section 338(h)(10) Election.
12.1.1 (i) Boise Cascade, Oxford and Purchaser
shall jointly make Elections (and any comparable election under
state or local tax law) with regard to each of the Companies
prior to or on the Closing date; (ii) Boise Cascade and Purchaser
shall, as promptly as practicable following the Closing date,
cooperate with each other to take all actions necessary and
appropriate (including filing such forms, returns, elections,
schedules and other documents as may be required) to effect and
preserve timely Elections in accordance with the provisions of
Treasury regulations promulgated under section 338 of the Code
(or any comparable provisions of state or local tax law) or any
successor provisions and (iii) Boise Cascade, Oxford and
Purchaser shall report the purchase by Purchaser of the Shares
pursuant to this Agreement consistent with the Elections (and any
comparable elections under state or local tax laws) and shall
take no position inconsistent therewith in any Tax Return, any
proceeding before any taxing authority or otherwise.
12.1.2 In connection with each Election,
Purchaser shall prepare, and Purchaser and Boise Cascade shall
agree to, the determination of the "Modified Aggregate Deemed
Sales Price" (as defined under Treasury regulation section
1.338(h)(10)-1(f)) and the allocation of each such "Modified
Aggregate Deemed Sales Price" among the assets of each respective
Company, which shall be finalized as of the Closing date, and
which shall be consistent with the Allocation contemplated by
Section 3.4 hereof. The determination of the amount of each such
"Modified Aggregate Deemed Sales Price" and the allocation
thereof shall be made in accordance with section 338(b) of the
Code and applicable Treasury regulations. Boise Cascade, Oxford
and Purchaser shall (i) be bound by such determination and such
allocation for purposes of determining any Taxes, (ii) prepare
and file, and cause their affiliates to prepare and file, Tax
Returns on a basis consistent with each such determination of the
"Modified Aggregate Deemed Sales Price" and each such allocation
and (iii) take no position, and cause their affiliates to take no
position, inconsistent with any such determination or allocation
on any applicable Tax Return, in any proceeding before any taxing
authority or otherwise. In the event that any such allocation
and/or determination is disputed by any taxing authority, the
party receiving notice of the dispute shall promptly notify the
other party hereto concerning resolution of the dispute.
12.1.3 As a result of the Election to be made
with respect to Rumford Cogen, the basis of the property owned by
RCC shall be adjusted in the manner provided in section 743 of
the Code pursuant to the election under section 754 of the Code
that has been filed by RCC and the income or loss of RCC for the
taxable year in which the Closing occurs, as it pertains to
Rumford Cogen, shall be allocated based on the interim-closing-
of-the-books method pursuant to section 706(c) of the Code and
Treasury regulations promulgated thereunder.
12.2 Tax Return Filing and Payment of Taxes
Responsibility.
12.2.1 Boise Cascade shall (i) prepare and
file, or cause to be prepared and filed, on a timely basis (in
each case, at its sole cost and expense) all Tax Returns with
respect to the Companies or otherwise relating to the Assets or
the Business for all taxable periods ending on or before the
Closing date (the "Pre-Closing Returns") and (ii) pay, or cause
to be paid, all Taxes shown to be due on such Pre-Closing
Returns.
12.2.2 The Purchaser shall (i) prepare and
file, or cause to be prepared and filed, on a timely basis (in
each case, at its sole cost and expense) all other Tax Returns
for all taxable periods ending after the Closing date with
respect to the Companies or otherwise relating to the Assets or
to the Business including Straddle Period Returns, and (ii) pay,
or cause to be paid, all Taxes shown to be due on such Tax
Returns.
12.2.3 In connection with any Straddle Period
Return, Boise Cascade shall be liable for and shall pay, or cause
to be paid, any Taxes for which Boise Cascade has agreed to
indemnify the Purchaser pursuant to Section 12.4 hereof. The
Purchaser shall provide Boise Cascade with copies of any Straddle
Period Returns at least twenty (20) days prior to the due date
thereof (giving effect to any extensions thereto), accompanied by
a statement calculating in reasonable detail the Boise Cascade
indemnification obligation pursuant to Section 12.4 hereof (the
"Tax Indemnification Obligation"). Boise Cascade shall pay, or
cause to be paid, to the Purchaser the amount of the Tax
Indemnification Obligation within ten (10) days of receiving
copies of the Straddle Period Returns (the "Boise Cascade
Preliminary Tax Payment"). If Boise Cascade objects to the
determination of the Tax Indemnification Obligation, the
Purchaser and Boise Cascade shall use reasonable efforts to
resolve such dispute, but if a final resolution is not obtained
within fifteen (15) days, the dispute shall be submitted to the
Independent Accountants with instructions that such Independent
Accountants render a determination with respect to the dispute
within thirty (30) days. The determination of the Independent
Accountants shall be conclusive and binding upon the parties in
the manner and to the same effect as a binding arbitration award.
All costs and expenses incurred relating to the engagement of the
Independent Accountants shall be shared equally by Boise Cascade
and the Purchaser. If the Tax Indemnification Obligation, as
finally determined, exceeds the amount of the Boise Cascade
Preliminary Tax Payment, Boise Cascade shall promptly pay, or
cause to be paid, the amount of such excess to the Purchaser. If
the Tax Indemnification Obligation, as finally determined, is
less than the amount of the Boise Cascade Preliminary Tax
Payment, the Purchaser shall promptly refund the amount of such
deficiency to Boise Cascade.
12.2.4 Boise Cascade, Oxford and the Purchaser
shall reasonably cooperate, and shall cause their respective
affiliates, officers, employees, agents, auditors and
representatives reasonably to cooperate, in preparing and filing
all Tax Returns (including amended returns and claims for
refund), including the issuance of a power of attorney and
maintaining and making available to each other all records
necessary in connection with Taxes and in resolving all disputes
and audits with respect to all taxable periods relating to Taxes.
12.3 Transfer and Similar Taxes. Notwithstanding any
other provision of this Agreement to the contrary, all sales
(including, without limitation, bulk sales), use, transfer,
gains, stamp, duties, recording and similar Taxes ("Transfer
Taxes") incurred in connection with the transactions contemplated
by this Agreement shall be shared equally by Boise Cascade and
Oxford, on the one hand, and the Purchaser, on the other. The
party charged by law with the duty of making the necessary
filings and returns with respect to such Transfer Taxes shall do
so in accordance with applicable law and that party shall be
reimbursed accordingly.
12.4 Tax Indemnification.
12.4.1 Notwithstanding anything in this
Agreement to the contrary and except as provided in Section
5.1.1, 12.3, and 12.4.2 hereof, Boise Cascade shall indemnify the
Purchaser and its affiliates and hold them harmless from and
against (i) any liability for Taxes of the Companies or otherwise
relating to the Assets or Business for all taxable periods ending
on or before the Closing date and for the Pre-Closing Period,
(ii) any liability for Taxes which result from (A) the deemed
sale of assets pursuant to the Elections, and (B) the deemed sale
of assets pursuant to any comparable elections under state or
local tax laws and (iii) any liability for Taxes imposed upon
either of the Companies pursuant to Treasury Regulation section
1.1502-6 as a result of being a member of the affiliated group,
within the meaning of section 1504 of the Code, of which the
Boise Cascade and Oxford are members.
12.4.2 Notwithstanding anything in this Agreement to
the contrary, the Purchaser shall indemnify Boise Cascade and its
affiliates and hold them harmless from and against (i) any
liability for Taxes of the Companies or otherwise relating to the
Assets or Business for any taxable period ending after the
Closing date (except to the extent such taxable period began
before the Closing date, in which case the Purchaser's indemnity
will cover only that portion of any such Taxes that is not
attributable to the Pre-Closing Period) and (ii) any liability
for real and personal property Taxes accrued on the Final Closing
Statement subject to any adjustment made pursuant to Section 4.3
hereof.
12.4.3 In the case of any Straddle Period, the
determination of the liability for Taxes for the Pre-Closing
Period shall be accrued on the Final Closing Statement on an
interim-closing-of-the-books basis as if such taxable period
ended on and included the Closing date, except that (i) all
standard deductions, exemptions, allowances and other similar
items shall be apportioned to the Pre-Closing Period on a per
diem basis and (ii) real and personal property Taxes shall be
apportioned between Boise Cascade and the Purchaser in accordance
with the principles under section 164(d) of the Code.
12.5 Procedures Relating to Indemnification of Tax
Claims.
12.5.1 If a claim for Taxes is made or a notice
of an audit is issued by any taxing authority in writing, which,
if successful, might result in an indemnity payment pursuant to
Section 12.4, the party seeking indemnification (the "Tax
Indemnified Party") shall promptly notify the other party (the
"Tax Indemnifying Party") in writing of such claim (a "Tax
Claim") within a reasonably sufficient period of time to allow
the Tax Indemnifying Party effectively to contest such Tax Claim,
and in reasonable detail to apprise the Tax Indemnifying Party of
the nature of the Tax Claim, and provide copies of all
correspondence and documents received by it from the relevant
taxing authority. Failure to give prompt notice of a Tax Claim
hereunder shall not affect the Tax Indemnifying Party's
obligation under Section 12.4, except to the extent that the Tax
Indemnifying Party is materially prejudiced by such failure to
give prompt notice.
12.5.2 With respect to any Tax Claim which
might result in an indemnity payment to the Purchaser pursuant to
Section 12.4 (including, without limitation, Taxes relating to a
Straddle Period), Boise Cascade shall control all proceedings
taken in connection with such Tax Claim and, without limiting the
foregoing, may in its sole discretion and at its sole expense
pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with respect
thereto, and may, in its sole discretion, either pay the Tax
claimed and xxx for a refund where applicable law permits such
refund suits or contest such Tax Claim. Boise Cascade shall not
under any circumstances settle or otherwise compromise any Tax
Claim referred to in the preceding sentence without the
Purchaser's prior written consent not to be unreasonably
withheld. In connection with any proceeding taken in connection
with such Tax Claim, (i) Boise Cascade shall keep the Purchaser
informed of all material developments and events relating to such
Tax Claim if involving a material liability for Taxes and (ii)
the Purchaser shall have the right to participate, at its sole
expense, in (but not control) any such proceedings. The
Purchaser shall cooperate with Boise Cascade in contesting such
Tax Claim, which cooperation shall include, without limitation,
the issuance of a power of attorney, the provision to Boise
Cascade of records and information which are reasonably relevant
to such Tax Claim, and making employees available to provide
additional information or explanation of any material provided
hereunder or to testify at proceedings relating to such Tax
Claim. In connection with such cooperation, Boise Cascade shall
reimburse Purchaser for any out-of-pocket expenses incurred with
respect thereto.
12.5.3 With respect to any Tax Claim not
described in the preceding paragraph which might result in an
indemnity payment to Boise Cascade pursuant to Section 12.4, the
Purchaser shall control all proceedings in accordance with
provisions that are parallel to those in Section 12.5.2.
12.6 Refunds and Credits. Any refunds and credits of
Taxes of any of the Companies or otherwise relating to the Assets
or the Business with respect to (i) any taxable period ending on
or before the Closing date shall be for the account of Boise
Cascade, and if received or utilized by the Purchaser or any of
its affiliates, shall be paid to Boise Cascade within five (5)
business days after the Purchaser or any of its affiliates
receives such refund or utilizes such credit, (ii) any taxable
period beginning after the Closing date shall be for the account
of the Purchaser, and if received or utilized by Boise Cascade,
or any of its affiliates, shall be paid by Boise Cascade to the
Purchaser within five (5) business days after Boise Cascade, or
any of its affiliates, receives such refund or utilizes such
credit, (iii) any Straddle Period shall be apportioned between
Boise Cascade and the Purchaser in the same manner as such Taxes
originally had been allocated pursuant to Sections 12.1.3 and
12.4.3 hereof and (iv) any Election (and any comparable elections
under state or local tax laws) shall be for the account of Boise
Cascade, and if received or utilized by the Purchaser, any of its
affiliates or either of the Companies shall be paid to Boise
Cascade within five (5) business days after Purchaser, any of its
affiliates or either of the Companies receives such refund or
utilizes such credit.
12.7 Termination of Tax Sharing Agreements. On or
prior to the Closing date, all tax sharing agreements and similar
arrangements to which either of the Companies is a party or
otherwise relating to the Assets or the Business shall be
terminated, all obligations thereunder shall be settled, and no
additional payments shall be made under any thereof after the
Closing date.
12.8 Employee Payroll Information. Boise Cascade and
Oxford shall transfer to the Purchaser any records relating to
withholding and payment of income and unemployment Taxes
(federal, state and local) and FICA Taxes with respect to wages
paid to Transferred Employees by Boise Cascade and Oxford during
the calendar year in which the Closing occurs (including, without
limitation, Forms W-4, Employee's Withholding Allowance
Certificate). The Purchaser shall provide the Transferred
Employees with Forms W-2, Wage and Tax Statement, for such
calendar year setting forth the wages paid and Taxes withheld
with respect to the Transferred Employees for the calendar year
in which the Closing occurs by Boise Cascade and Oxford and the
Purchaser as predecessor and successor employers, respectively,
as provided by Revenue Procedure 84-77.
12.9 Survival of Tax Provisions. Any claim to be made
pursuant to this Section 12 must be made before the expiration
(with valid extensions) of the applicable statute of limitations
relating to the Taxes at issue.
13. Risk of Loss. If any loss or damage is suffered prior
to Closing to any portion of the Assets which is not material,
Boise Cascade shall at its sole cost and expense repair or
replace such damaged or lost assets as soon as reasonably
practicable and the Closing shall proceed without delay or
adjustment to the Purchase Price on account of such loss or
damage. Purchaser shall not, in such event, be entitled to or
have any claim against the proceeds of insurance held by Boise
Cascade covering such loss. If any of the Assets which are not
material are condemned prior to Closing, Closing shall proceed
without delay or adjustment of the Purchase Price, provided that
Boise Cascade shall deliver the condemnation proceeds to
Purchaser or if such condemnation proceedings have not been
concluded prior to Closing, Boise Cascade shall at Closing assign
its rights in such proceeding to Purchaser. For purposes of this
Section 13, "material" shall mean Assets lost, damaged, or
condemned with a book value greater than $65,000,000 or
materially affecting the operations of the Rumford Facility.
14. Closing and Termination.
14.1 Closing. The Closing shall occur at 10:00 a.m.,
Mountain standard time, on November 26, 1996, at the offices of
Boise Cascade, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx, Xxxxx 00000-
0001, or at such other time and place as Purchaser and Boise
Cascade mutually agree upon in writing. If Closing does not
occur on November 26, 1996, or any other date agreed upon by the
parties, because one or more conditions precedent are not
satisfied, then in such event the Closing shall be delayed to a
later date agreed upon by the parties, and if the parties are
unable to agree upon such a date, it shall be the first business
day which is at least 10 days after the day all of the conditions
precedent are satisfied.
14.2 Termination. This Agreement may be terminated at
any time prior to the Closing as follows, and in no other manner:
14.2.1 By mutual consent of Purchaser and Boise
Cascade;
14.2.2 By either Boise Cascade or the
Purchaser, if, through no fault of the party seeking termination,
the Closing shall not have occurred on or prior to June 30, 1997.
14.2.3 By either Boise Cascade or the Purchaser
if any court or governmental body having competent jurisdiction
shall have issued a preliminary injunction or other similar or
final order enjoining the transactions contemplated hereby.
14.2.4 By Purchaser in the event any
representation or warranty made herein for the benefit of
Purchaser, or in any certificate, schedule or documents furnished
to Purchaser, pursuant to this Agreement is untrue in any
material respect, or Boise Cascade shall have defaulted in any
material respect in the performance of any material obligation
under this Agreement, which breach or default has not been cured
within 10 days (or such longer period as is reasonably necessary
to cure such breach or default) after notice of such breach or
default;
14.2.5 By Boise Cascade at any time prior to
Closing if any representation or warranty made herein for the
benefit of Boise Cascade, or in any certificate, schedule, or
documents furnished to Boise Cascade, pursuant to this Agreement
is untrue in any material respect, or Purchaser shall have
defaulted in any material respect in the performance of any
material obligation under this Agreement, which breach or default
has not been cured within 10 days (or such longer period as is
reasonably necessary to cure such breach or default) after notice
of such breach or default.
14.3 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 14.2,
written notice thereof shall forthwith be given by the
terminating party or parties to the other party or parties
specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become
null and void, and there shall be no liability on the part of
Boise Cascade, Oxford or the Purchaser; provided that nothing
herein shall relieve any party from any liability or obligation
with respect to any willful breach of this Agreement.
15. Conditions Precedent to Closing.
15.1 Purchaser. Purchaser shall have no obligation to
attend and carry out the actions required of it at the Closing
unless all of the following conditions precedent shall have been
satisfied:
15.1.1 Continued Truth of Representations and
Warranties. All the representations and warranties of Boise
Cascade and Oxford contained in this Agreement shall continue to
be true and correct at the Closing in all material respects as if
made on and as of the Closing.
15.1.2 Performance of Obligations. Boise
Cascade shall have performed or tendered performance of each and
every one of its obligations hereunder which by its terms is to
be performed at or prior to Closing.
15.1.3 Delivery of Closing Documents. Boise
Cascade and Oxford shall have tendered delivery to Purchaser of
all of the documents required to be delivered under Section 16.1
hereof to Purchaser by it at Closing.
15.1.4 Third-Party Consents. Boise Cascade
shall have obtained and delivered to Purchaser the required
consents, if any, to the assignment of those Contracts and
Facility Leases listed on Schedule 6.2.1.
15.1.5 Legal Proceedings. No order shall have
been entered and not vacated by or before any court,
administrative agency or other governmental authority to
restrain, prohibit or invalidate any of the transactions
contemplated by this Agreement. No action, suit, proceeding or
investigation by any administrative agency or other governmental
authority regarding the transactions contemplated by this
Agreement shall have been instituted and be continuing.
15.1.6 Condemnation. No material (as defined
in Section 13 hereof) portion of the Assets have been destroyed
or are threatened with or subject to any condemnation proceeding.
15.1.7 Permits and Governmental Consents. All
material permits and licenses required for the operation of the
Business shall have been obtained by Purchaser or transferred to
or reissued in Purchaser's name and all material consents and
approvals of any federal, state, county, local, or other
governmental or regulatory body required for any of the
execution, delivery, or performance of this Agreement shall have
been obtained, except for any such permit, license, consent, or
approval which is routinely and customarily given or granted or
issued in connection with similar transactions by the
governmental entity empowered to do so after the transaction has
closed.
15.1.8 HSR Filing. The applicable waiting
period under the HSR Act with respect to the actions contemplated
by this Agreement shall have expired or been earlier terminated.
15.1.9 Environmental Assessment. Purchaser
shall have completed its Environmental Assessment.
15.2 Boise Cascade. Boise Cascade shall have no
obligation to attend and carry out the actions required of it at
the Closing unless all of the following conditions precedent
shall have been satisfied:
15.2.1 Continued Truth of Representations and
Warranties. All the representations and warranties of Purchaser
contained herein shall continue to be true and correct as of the
Closing in all material respects as if made on and as of the
Closing date.
15.2.2 Performance of Obligations. Purchaser
shall have substantially performed or tendered substantial
performance of each and every one of its obligations hereunder
which by its terms is to be performed at or prior to the Closing.
15.2.3 Delivery of Closing Documents.
Purchaser shall have tendered delivery to Boise Cascade of all
the documents and payments required to be delivered under
Section 17.1 hereof to Boise Cascade by it at the Closing
pursuant to this Agreement.
15.2.4 Legal Proceedings. No order shall have
been entered and not vacated by or before any court,
administrative agency or other governmental authority to
restrain, prohibit or invalidate any of the transactions
contemplated by this Agreement.
15.2.5 HSR Filing. The applicable waiting
period under the HSR Act with respect to the actions contemplated
by this Agreement shall have expired or been earlier terminated.
16. Items to be Delivered by Boise Cascade.
16.1 Closing. At Closing, Boise Cascade shall deliver
the following items to Purchaser:
16.1.1 Title Certificates. A certificate of
title for each registered motor vehicle held by Boise Cascade or
Oxford.
16.1.2 Opinion of Counsel. The opinion of
X. X. Xxxxxxxx, Senior Vice President and General Counsel of
Boise Cascade, to the effect that:
16.1.2.1 Organization. Boise Cascade,
Oxford, Rumford Falls, and Rumford Cogen are corporations duly
organized, validly existing and in good standing under the laws
of their respective states of incorporation and that they are
qualified or licensed to do business in all states in which they
operate the Business;
16.1.2.2 Authority. Boise Cascade and
Oxford's execution and performance of this Agreement have been
duly authorized by all necessary corporate action, and this
Agreement and each certificate and document to be executed and
delivered by it hereunder at or prior to the Closing are valid,
legally binding obligations of Boise Cascade and Oxford,
enforceable against Boise Cascade and Oxford in accordance with
their terms and conditions except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (whether applied in
a proceeding at law or in equity);
16.1.2.3 Absence of Conflict. None of the
execution, delivery, or the performance of this Agreement
constitutes a breach of or allows for the acceleration of the
rights of any party under any material contract, loan agreement,
note, security agreement, lease, indenture or other agreement to
which any of the Entities, or, to the best knowledge of such
counsel, RCC is a party or any provision of Boise Cascade and
Oxford's articles of incorporation, bylaws, or any of the
standing resolutions of its board of directors; and
16.1.2.4 Litigation. None of the Entities,
Androscoggin, or Gulf Island are a party to any lawsuit or
administrative proceeding, nor, to the best of counsel's
knowledge, has any person threatened to commence any lawsuit or
administrative proceeding against any of the Entities,
Androscoggin, or Gulf Island except for pending or threatened
lawsuits in respect of Boise Cascade or its subsidiaries which do
not seek to prohibit or restrain the transactions provided for in
this Agreement or call into question the title to any of the
Assets.
16.1.3 Certified Resolution. A copy of the
resolutions of the Board of Directors of Boise Cascade and Oxford
authorizing the execution and performance of this Agreement,
certified by the Secretary or an Assistant Secretary of Boise
Cascade and Oxford;
16.1.4 Representations and Warranties. A
certificate signed by an officer of Boise Cascade to the effect
that (i) all of the representations and warranties of Boise
Cascade and Oxford contained herein are true and correct in all
material respects as of Closing as if made on and as of the date
thereof; and (ii) Boise Cascade and Oxford have performed and
complied with or tendered performance of all of its covenants and
agreements contained herein which by their terms are to be
performed or complied with prior to or as of Closing;
16.1.5 Consents to Assignment. All consents,
opinions of counsel, and other third-party action Boise Cascade
is required to obtain with respect to the Contracts and Facility
Leases listed in Schedule 6.2.1;
16.1.6 Assignments. Such assignments, bills of
sale and other instruments of conveyance as may be required to
convey the Assets from Boise Cascade or Oxford to Purchaser;
16.1.7 Deeds. Deeds in recordable form to the
Realty and Timberlands;
16.1.8 FIRPTA Certificate. A duly executed
affidavit of non-foreign status by each of Boise Cascade and
Oxford described in Section 1445 of the Code; and
16.1.9 Forms 8023. For each of the
Companies, duly completed Internal Revenue Service Forms 8023
(Corporate Qualified Stock Purchase Elections) which are signed
by an appropriate officer of the Purchaser, Boise Cascade and
Oxford.
16.1.10 Additional Items. Such additional
documents, instruments, and other items as counsel for Purchaser
may reasonably request.
17. Items to be Delivered at Closing by Purchaser.
17.1 At Closing, Purchaser shall deliver the following
items to Boise Cascade:
17.1.1 Certified Resolutions. A copy of the
resolutions of the boards of directors of Purchaser and Purchaser
Parent authorizing the execution and performance of this
Agreement certified by the secretary or an assistant secretary of
Purchaser and Purchaser Parent respectively;
17.1.2 Representations and Warranties. A
certificate signed by an officer of Purchaser to the effect that
(i) all of the representations and warranties of Purchaser
contained in this Agreement are true and correct in all material
respects as of Closing as if made on and as of Closing; and (ii)
Purchaser has performed and complied with all of its covenants
and agreements contained herein which by their terms are to be
performed or complied with prior to Closing;
17.1.3 Opinion of Counsel. An opinion of
Xxxxxx X. Xxxxxx, Vice President and General Counsel of Purchaser
Parent, to the effect that:
17.1.3.1 Organization. Purchaser is a
corporation duly organized, validly existing, and in good
standing under the laws of the state of Delaware, and the
Purchaser Parent is a corporation organized and existing in good
standing under the laws of the state of Ohio;
17.1.3.2 Authorization. The execution,
delivery, and performance of this Agreement by Purchaser and
Purchaser Parent have been duly authorized by requisite corporate
action lawfully and duly taken and that this Agreement is a
valid, legally binding obligation of Purchaser and Purchaser
Parent, enforceable against each of them in accordance with its
terms and conditions except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally
and by general principles of equity (whether applied in a
proceeding at law or in equity);
17.1.3.3 Absence of Conflict. None of the
execution, delivery, or performance of this Agreement by
Purchaser and Purchaser Parent constitutes a breach of, or allows
for the acceleration of the rights of any party under, any
material contract, loan agreement, note, security agreement,
lease, indenture, or other agreement to which Purchaser or
Purchaser Parent is a party or any provision of their respective
articles of incorporation, bylaws, or any of the standing
resolutions of their boards of directors; and
17.1.3.4 Litigation. Neither Purchaser nor
Purchaser Parent is a party to any lawsuit or administrative
proceeding, nor, to the best of such counsel's knowledge, has any
person threatened to commence any lawsuit or administrative
proceeding against Purchaser or Purchaser Parent, except for
pending or threatened lawsuits in respect of Purchaser or
Purchaser Parent, which do not seek to prohibit or restrain the
transactions provided for in this Agreement.
17.1.4 Purchase Price. The preliminary
Purchase Price payment; and
17.1.5 Additional Items. Such additional
documents, instruments, and other items as counsel for Boise
Cascade may reasonably request.
18. Press Releases. No press release or other public
statement regarding this Agreement or the contents hereof shall
be made by either party hereto without prior consultation with
the other party except as may be necessary in the opinion of its
counsel for each party to meet the requirements or regulations of
any applicable law, governmental unit, or agency or stock
exchange in which the securities of such party may be listed, in
which event, the party required to make the release or statement
shall advise the other party of its intention to make a release
or statement and shall provide a copy of the proposed release
prior to its public release.
19. Claims and Litigation.
19.1 Scope of Representations and Warranties. EXCEPT
AS AND TO THE EXTENT SPECIFICALLY SET FORTH IN THIS AGREEMENT OR
ANY SCHEDULE, EXHIBIT OR ANY DOCUMENT OR POLICY ATTACHED AS A
SCHEDULE OR EXHIBIT HERETO, OR ANY OF THE DOCUMENTS DELIVERED AT
THE CLOSING, THE ENTITIES HEREBY DISCLAIM ALL OTHER
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS, IMPLIED, OR
STATUTORY, IN CONNECTION WITH THE ASSETS, OR THE BUSINESS,
INCLUDING BUT NOT LIMITED TO (i) THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; (ii) ANY
OPINION, INFORMATION OR ADVICE BY ANY OFFICER, DIRECTOR,
EMPLOYEE, AGENT, CONSULTANT, OR REPRESENTATIVE OF BOISE CASCADE
IN CONNECTION WITH THE NEGOTIATIONS OF THIS TRANSACTION; OR (iii)
ANY BUSINESS OR MARKETING PLANS, STRATEGIES, OR BUDGETS THAT MAY
HAVE BEEN OR MAY BE REVIEWED OR DISCOVERED BY PURCHASER DURING
ITS EXAMINATION OF THE BUSINESS.
19.2 Survival of Representations and Warranties. The
respective representations and warranties of Boise Cascade and
Oxford contained herein shall survive for a period of two years
after Closing except that their representations and warranties
relating to environmental or tax matters shall survive until the
expiration of the applicable statutes of limitations, including
any extensions thereof. Purchaser's representations and
warranties set forth herein shall survive Closing for a period of
two years after Closing. At the end of the applicable survival
period set forth above, Boise Cascade or Purchaser, as the case
may be, shall, without further action as to such representations
and warranties, be deemed to have fully released each other from
any and all responsibilities arising thereunder unless during
such period the one party shall have notified the other party in
writing of the nature and particulars of any claim breached by
the other party and that party's intent to seek an award for
damages or other available remedies for such breach. Nothing in
the preceding sentence shall constitute a waiver or release of
rights Purchaser may have under applicable law (without regard to
the content of this Agreement) against Boise Cascade for
contamination of any of the Realty or Timberlands, any
improvement thereto, or any adjoining realty with a Hazardous
Material as heretofore defined.
19.3 Indemnification by Boise Cascade. Except for
Environmental Liabilities and Costs (which shall be governed by
Section 19.4), Boise Cascade, from and after the Closing, shall
indemnify and hold Purchaser and its affiliates and any of their
respective officers, directors, and employees harmless from and
against any and all liabilities, claims for personal injury or
property damages, and losses (including all related claims for
legal fees, costs, and expenses in connection therewith) asserted
by an unrelated third party ("Claims") which are suffered or
incurred by Purchaser with respect to (i) any Claims arising out
of any event or events occurring prior to Closing and related to
Boise Cascade's operation of the Assets or the Business other
than the Assumed Liabilities; (ii) any Claims arising out of the
noncompliance by Boise Cascade with the bulk sales laws of any
state in which all or any part of Assets are located with respect
to the transfer thereof hereunder; (iii) any debts, liabilities
or obligations of Boise Cascade and Oxford whether or not related
to the Business other than Assumed Liabilities; (iv) any Claims
by any Employee who rejects Purchaser's offer of employment in
respect of the termination of such Employee's employment with
Boise Cascade, so long as such offer of employment meets the
requirements of this Agreement; and (v) fines and penalties for
violations of the Occupational Safety and Health Act, 29 U.S.C.
Section 651, et seq. or similar state statute, which arises out of
Boise Cascade's or Oxford's operation of the Business.
19.4 Environmental Indemnification by Boise Cascade.
19.4.1 During the Operating Period. Boise
Cascade hereby agrees to defend, indemnify and hold harmless
Purchaser and its successors, assigns and affiliates from and
against any and all Environmental Liabilities and Costs,
resulting from, arising out of or otherwise relating to:
(a) Any misrepresentation or breach of warranty,
agreement or undertaking hereunder on the part of Boise Cascade,
and any undertaking or other agreement or obligation hereunder;
(b) All penalties and fines and the costs of
defending, settling, or otherwise disposing of such actions
resulting from Boise Cascade's operation of the Business prior to
Closing due to violation of Environmental Laws and all laws
relating to endangered or threatened species of fish, wildlife,
and plants and the management or use of natural resources; or
(c) Any Release of Hazardous Material that
occurred during the Operating Period.
19.4.2 During and After the Operating Period. To
the extent that Cleanup is required or undertaken of Hazardous
Materials Released both during the Operating Period and after the
Operating Period, liability for such Cleanup shall be equitably
allocated between Boise Cascade and Purchaser based on the type
and estimated quantity of such Releases, or if those are not
known or reasonably determinable, the time period during which
such Releases took place. In such an equitable allocation, Boise
Cascade shall be responsible for Releases during the Operating
Period and Purchaser for Releases after the Operating Period.
Boise Cascade and Purchaser acknowledge that any Releases
discovered by Purchaser within six months following the Closing
and which commenced both during the Operating Period and prior to
the Closing shall be deemed to have occurred entirely during the
Operating Period, unless Purchaser failed or fails to take steps,
to the extent reasonably practicable, to prevent the spread or
migration of such a Release.
19.5 Indemnification by Purchaser. Purchaser, from and
after the Closing, shall indemnify and hold Boise Cascade and its
officers, directors, and employees harmless from and against any
and all Claims suffered or incurred by Boise Cascade with respect
to (i) any Claims arising out Purchaser's conduct of the Business
from and after Closing; (ii) any failure by Purchaser to fully
and completely discharge any portion of the Assumed Liabilities;
and (iii) any Claims by any Employee hired by Purchaser who is
subsequently terminated by Purchaser except to the extent that
such claim relates to specific acts of Boise Cascade, its agents
or employees, which are unrelated to the termination.
19.6 Limitation of Liability. Notwithstanding any
other term or condition of this Agreement, neither Boise Cascade
nor Purchaser shall be liable to the other party with respect to
any claims under Section 6 or Section 7 hereof until the aggre-
gate direct damages arising from breaches of the representations
and warranties set forth in Sections 6 and 7, suffered or
incurred by such other party hereto exceeds $500,000, (except
that, with respect to claims under Sections 6.17 and 19.4 hereof,
the threshold shall be $250,000 and shall not be included in the
$500,000 threshold and with respect to Sections 6.4 and 12.4, the
threshold will be $0) whereupon such other party shall be
entitled to indemnification hereunder for the aggregate damages
suffered by such other party with respect to the Claims to the
extent they exceed $500,000, $250,000, or $0, as the case may be.
In calculating any amount to be paid by Boise Cascade or
Purchaser pursuant to this Section 19.6, such amount shall be
reduced by all insurance proceeds, and other reimbursements (but
excluding any calculation of the tax effect of the loss or injury
involved) actually received by the other party hereto and
relating to such damages and each party waives the rights of
subrogation that the issuer of any such insurance or other
reimbursing entity may have against the other party in respect of
such Claim. If the damages suffered by Purchaser arising from a
claim based upon a breach of or inaccuracy in any of the
representations and warranties of the Entities set forth in
Section 6 hereof is also a debt, liability or obligation of any
of the Entities which Purchaser has not assumed as an Assumed
Liability, then the limitations set forth in this Section 19.6
(irrespective of whether such matter is disclosed hereunder)
shall not apply or restrict Purchaser's right to indemnification.
Neither party shall be liable for incidental, indirect, special,
collateral, consequential, exemplary or punitive damages arising
out of any breach of any representation or warranty under this
Agreement.
19.7 Procedure. In the event that, from and after
Closing, a third person asserts any Claim against Boise Cascade,
Purchaser, or any other person entitled to indemnity pursuant to
Section 19.3, 19.4, or 19.5 with respect to any matter to which
the foregoing indemnities relate, other than any Tax Indemnity
pursuant to Section 12.4, the party hereto against whom the Claim
is asserted (the "Indemnified Party") shall give prompt notice to
the other party (the "Indemnifying Party") and the Indemnifying
Party shall take over the defense or settlement of such Claim at
its own expense by giving prompt written notice to the
Indemnified Party, provided that such written notification shall
expressly acknowledge the Indemnifying Party's responsibility to
indemnify and hold the Indemnified Party harmless from and
against such third-party Claim. The parties hereto shall
cooperate in defending any such third-party Claim and the
defending party hereto shall have reasonable access to the books
and records in the possession or control of the other party
hereto which are pertinent to the defense.
19.8 Release of Hazardous Material Claims. In the
event that Purchaser seeks indemnity for any Claim which arises
from the Release of a Hazardous Material on any parcel of the
Realty or the Timberlands, Purchaser: (i) shall give Boise
Cascade prompt notice of its discovery of such Claim; and (ii) if
Purchaser's good faith estimate of the cost of Cleanup in respect
of such claim is more than $1,000,000 (a "Large Cleanup"), it
shall afford Boise Cascade a right to manage and control the
Cleanup of the Release giving rise to such claim which shall
include the negotiation and settlement of any fines or penalties
associated therewith. In connection with the conduct of a Large
Cleanup, Boise Cascade shall (i) provide Purchaser with current
information on the progress of the Cleanup; (ii) allow Purchaser
to comment on the plans developed therefor as they are developed
from time to time; (iii) not take actions which materially or
substantially impair the operation of the Facility at which such
Release occurred; (iv) not have any authority to commit Purchaser
to any consent decree or other settlement arrangement with a
third party which requires any action other than a payment of
money which shall be supplied by Boise Cascade; and (v) provide
Purchaser, prior to beginning work on the affected Realty or
Timberlands, with an indemnity and insurance coverage as set
forth in Schedule 19.8 hereof. Notwithstanding the foregoing,
Purchaser may, at its option, in connection with any Large
Cleanup, elect to manage and control the Cleanup itself, in which
event it shall bear 10% of the Cost of Cleanup resulting
therefrom. In the event of such election, Purchaser shall (i)
provide Boise Cascade with current information on the progress of
the Cleanup; and (ii) allow Boise Cascade the right to comment
upon the plans therefor as they are developed from time to time.
19.9 Litigation Assistance. Boise Cascade and
Purchaser shall make reasonably available to one another the
services of any of their respective employees who have knowledge
of facts involved in any proceeding or litigation, threatened or
actual, to which Boise Cascade or Purchaser is, or is likely to
become, a party and which arises out of Boise Cascade's conduct
of the Business prior to Closing or the provision of any services
or sale of goods after Closing which, in any way, relate to any
inventory on hand at Closing. Such employees shall be made
available for purposes of testimony and assistance to their
respective attorneys, insurers, and other agents of Boise Cascade
or Purchaser, as the case may be, and for evaluation of and
preparation for trial, arbitration, or other resolution of
litigation. The party requiring that employees be made available
in accordance with this Section shall reimburse the employing
party for reasonable expenses including the cost of travel, food,
and lodging.
19.10 Treatment of Indemnification Payments. Any
indemnification payment made pursuant to this Agreement by Boise
Cascade to the Purchaser or by the Purchaser to Boise Cascade, as
the case may be, shall be treated as a Purchase Price adjustment
for all Tax purposes.
19.11 Presumption of Sale. Any product liability
claim for injury or damages or product warranty claim from
products manufactured at the Rumford Facility from and after the
Closing, shall be a claim for which Purchaser is responsible.
Any product liability claim for injury or damages or product
warranty claims from products manufactured at the Rumford
Facility prior to the Closing shall be a claim for which Boise
Cascade is responsible. As of the Closing, Purchaser shall
substitute its label for Boise Cascade's on all products
manufactured by Purchaser at the Rumford Facility.
19.12 Preservation of Records. Title to all
records of Boise Cascade pertaining primarily to the Business,
including, without limitation, property records, engineering
records, purchasing and sales records, personnel and payroll
records, accounting and financial books and records, customer and
vendor lists and records, and any and all other warehouse and/or
office books and records of the Business ("Records") shall be
transferred to Purchaser at Closing. Notwithstanding the
foregoing provision, ownership and possession of all accounting
and financial records of the Business located in Boise, Idaho,
which are necessary to prepare consolidated financial statements
or income tax returns for Boise Cascade ("Accounting Records")
shall be retained by Boise Cascade. Purchaser and Boise Cascade
shall, respectively, maintain the Records and the Accounting
Records for the lesser of seven years or the standard retention
policy of the holder, provided that no Records or Accounting
Records shall be destroyed unless the holder provides the other
party hereunder with at least 90 days' prior written notice.
Upon receipt of notice of destruction, the nonholder shall have
the option, at its sole cost and expense, to take possession of
the records set for destruction, in which case the nonholder
shall assume all further cost of storage and destruction of such
records.
20. Costs. Each party agrees that to the extent that it
has heretofore utilized or subsequently utilizes the services of
any accountant, attorney, broker, finder, economist, investment
banker, or other similar firm or individual in connection with
this transaction, it will pay the fee of such firm or individual.
21. Corporate Identification. As of the Closing, Boise
Cascade shall be deemed to have assigned the trade name "Oxford
Paper Company," and any and all related trade names, to the
Purchaser and, in connection with the Closing, shall change the
corporate name of Oxford. Except as otherwise provided herein,
Purchaser shall disassociate the trade names "Boise Cascade" and
the trademark "[LOGO]" (collectively the Reserved Identification")
as soon after the Closing as is practicable but in any event
no later than one year after Closing. If Purchaser is unable
to meet any of the following requirements within that
time, Purchaser shall provide to Boise Cascade the written
explanation for the delay and a timetable for completion of the
requirements and any such reasonable explanation shall not result
in a default. To this end, the following actions shall be taken
by Purchaser:
21.1 Motor Vehicles. Within 120 days from the date of
Closing, Purchaser shall repaint all motor vehicles acquired by
it and signs on Facilities acquired hereunder so as to eliminate
the Reserved Identification.
21.2 Correspondence. Immediately after Closing,
Purchaser shall instruct all of its employees to indicate on the
internal and external correspondence that, notwithstanding the
letterhead on any such correspondence, the source of the
correspondence is Purchaser and not Boise Cascade.
21.3 Promotional Materials. Within 120 days after
Closing, Purchaser shall have printed and distributed to its
production, management, and sales force stickers for all forms of
sales and promotional materials and stationery which will overlay
the Reserved Identification on such materials with the name
and/or logo of Purchaser.
21.4 Phone Books. Purchaser shall cause the Reserved
Identification to be deleted from all phone book listings as soon
as reasonably practical.
21.5 Advertising. Media advertising, sponsored or paid
for in part by Purchaser (including co-op advertising programs)
shall utilize Purchaser's name and/or corporate logo. Such
advertising and other promotional materials may, for a period of
one year from the date of Closing, contain a statement to the
effect that Purchaser has acquired the Rumford Facility of Boise
Cascade.
22. Notices. Any notice or demand required or permitted to
be given under the terms of this Agreement shall be deemed to
have been duly given or made if given by any of the following
methods and shall be effective as indicated below in respect of
each such means of notice:
22.1 If deposited in the United States mail, in a
sealed envelope, postage prepaid, by registered or certified
mail, return receipt requested, respectively addressed as set
forth below, such notice shall be effective on the 7th business
day following mailing.
22.2 If sent to the address set forth below via an
established national overnight delivery service (such as Federal
Express), charges prepaid, such notice shall be effective on the
next business day following dispatch.
22.3 If sent via any electronic communications method,
provided the sender obtains written confirmation of receipt of
the communication by the electronic communication equipment at
the office of the addressee listed below, such notice shall be
effective on the next business day following dispatch.
To Boise Cascade: Boise Cascade Corporation
Attn: Chief Financial Officer
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000-0000
Telephone: 208/000-0000
Telecopy: 208/384-4913
Copy to: Boise Cascade Corporation
Attn: Senior Vice President
and General Counsel
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Telephone: 208/000-0000
Telecopy: 208/384-4912
To Purchaser: Xxxx Oxford Corporation
c/o The Xxxx Corporation
Attn: Chief Financial Officer
Xxxxxxxxxx Xxxxx X.X.
Xxxxxx, XX 00000
Telephone: 513/000-0000
Telecopy: 513/461-2424
Copy to: The Xxxx Corporation
Attention Vice President and
General Counsel
Xxxxxxxxxx Xxxxx X.X.
Xxxxxx, XX 00000
Telephone: 513/000-0000
Telecopy: 513/461-2424
23. Transition Services. The parties agree that certain
services currently provided to the Business may need to be continued
for a period of time after Closing and that the nature and extent of
such need was difficult to ascertain prior to the execution of this
Agreement. The parties agree that at or before Closing, they will
determine a definitive transition services agreement which will
address the following:
23.1 Computer Systems. The parties will determine a
transition process to assure that the computer systems relied upon by
the Business are continued in a manner which allows Purchaser to
continue to operate the Business, such transition period not to exceed
six months from Closing. Purchaser shall provide compensation to
Boise Cascade in accordance with Boise Cascade's customary schedule of
charges from time to time in effect in respect to intracompany
computer services. During the transition period, Boise Cascade and
the Purchaser shall cooperate with respect to the transfer to the
Purchaser's system of all information relating to the Business.
23.2 Transportation Services. Transportation services,
including rail, truck, and intermodal services are currently provided
by the Transportation Division of Boise Cascade and BCT, pursuant to
contracts between the Rumford Facility and BCT. Such contracts shall
be assigned to Purchaser. BCT shall continue to provide such services
for a period of up to six months, at market prices. During such
transition period, the Purchaser and BCT shall discuss in good faith
the best manner in which to transfer such operations to the Purchaser.
In furtherance thereof, Purchaser shall acquire all of the Trucking
Terminal assets at a price equal to the net book value of such assets
upon completion of such transition arrangements which are agreed upon
pursuant to this Section 23.2.
23.3 Benefit Plan Services. Boise Cascade shall provide
claims processing services relating to the New Plans and the pretax
premium medical, dental, and vision plans adopted by Purchaser
pursuant to Sections 11.7 and 11.4.2 hereof for claims for services
rendered on or before December 31, 1996, and which are timely filed
under the terms of such plans. Purchaser shall compensate Boise
Cascade for such services at Boise Cascade's cost per claim processed,
as described in the definitive transition services agreement.
23.4 Other Services. For a period not to exceed six months
after the Closing, Boise Cascade shall reasonably cooperate with and
provide to the Purchaser those services Boise Cascade presently
provides to the Business as Purchaser shall reasonably require.
Purchaser shall use its best efforts to arrange for replacement
services as promptly as practical. The Purchaser shall reimburse
Boise Cascade in accordance for Boise Cascade's fully loaded cost of
providing such services.
24. Bulk Sales. Purchaser hereby waives compliance with
any relevant bulk sales law and Boise Cascade hereby promises to
hold harmless, indemnify and defend Purchaser against any loss,
damage, claim, or demand which may be made against it or against
the Purchased Assets by reason of such noncompliance.
25. Further Assurances. Each party shall at any time after
Closing execute and deliver to the other party all such
additional instruments of conveyance and assignment, certificates
or documents as such other party may reasonably request in order
to further perfect the intent of this Agreement.
26. Governing Law. This Agreement shall be governed by
Delaware state law without regard to its choice of law provision.
27. Entire Agreement. This Agreement, together with the
nondisclosure agreement referred to in Section 9.2 hereof,
constitutes the entire agreement between the parties with respect
to the subject matter hereof and merges and replaces all prior
negotiations, discussions, representations, warranties, offers,
and agreements between the parties with respect to the subject
matter hereof.
28. Amendment. This Agreement may be amended only by a
written instrument signed by all of the parties hereto.
29. Assignment. No party shall sell, assign, mortgage,
pledge, or otherwise transfer this Agreement or any of its rights
hereunder without the prior written agreement of the other party;
provided, however, that Purchaser Parent may transfer any of its
rights hereunder in connection with a transfer of any of the
Assets, in whole or in part; provided further, however, that
Purchaser shall not be relieved of any of its obligations
hereunder as a result of any such transfer. Any sale,
assignment, mortgage, pledge, or other transfer attempted in
violation of this provision shall, at the option of the
nontransferring party, be void.
30. Counterparts. This Agreement may be executed in two or
more duplicate counterparts and upon the execution and delivery
thereof by each party of at least one such counterpart, such
counterparts shall collectively constitute a fully executed and
delivered agreement as though all parties had signed a single
counterpart of the agreement.
31. Severance. If any of the provisions of this Agreement
are found to be illegal, void, or unenforceable, such provision
shall be deemed eliminated from this Agreement and the balance of
the Agreement shall remain fully enforceable in accordance with
its terms; provided that, if such elimination causes this
Agreement to fail in its essential purpose, this Agreement shall
be terminated.
32. Unconditional and Unlimited Guaranties.
32.1 Purchaser Parent hereby extends to Boise Cascade
and Oxford an unconditional and unlimited guaranty of the
performance by Purchaser of all of its obligations arising
hereunder and under any agreement, certificate, or other
instrument or document delivered by Purchaser pursuant hereto,
including, without limitation, the timely performance by
Purchaser of the Assumed Liabilities and the payment of the
Purchase Price.
32.2 At Closing, Purchaser Parent shall extend to RCC
its guaranty of the performance by Purchaser of the obligations
assumed by it under the Contracts assumed by Purchaser at Closing
in which RCC is a counterparty. Such guaranty shall be in
substantially the same form as the guaranty of such obligations
extended to RCC by Boise Cascade on behalf of Oxford dated
October 21, 1987; and, to the extent required to obtain the
necessary consents to assignment, it shall execute and deliver to
Bank of America, N.T. & S.A., as Agent, a Consent to Assignment
of such Guaranty by RCC, which shall be substantially in the form
of a Consent to Assignment of certain project agreements extended
by Boise Cascade to Bank of America, N.T. & S.A., dated as of
October 21, 1987, to the extent such Consent related to the Boise
Cascade Guaranty referred to above.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
BOISE CASCADE CORPORATION
By ___________________________
Title ________________________
OXFORD PAPER COMPANY
By ___________________________
Title ________________________
XXXX OXFORD CORPORATION
By ___________________________
Title ________________________
THE XXXX CORPORATION
By ___________________________
Title ________________________
LIST OF SCHEDULES
SCHEDULE/TITLE
SCHEDULE 1.25 Excluded Assets
SCHEDULE 1.27 Part I -- Facility Leases Used in the
Business
Part II -- Leased Real Property Held by
Rumford Cogen, Rumford Falls, and RCC
SCHEDULE 1.33 Historical Balance Sheet
SCHEDULE 1.34 Industrial Revenue Bonds
SCHEDULE 1.35 Part I -- Intangible Rights Used
Exclusively in the Business
Part II -- Intangible Rights Used in the
Business on a Nonexclusive Basis and Deemed
Excluded Assets
SCHEDULE 1.37 Joint Facilities
SCHEDULE 1.43 Form of Preliminary Closing Statement
SCHEDULE 1.46 Realty
SCHEDULE 1.50 Rumford Cogeneration Support Contracts
SCHEDULE 1.60 Summary Description of Timberlands
SCHEDULE 5.3 Excluded Liabilities
SCHEDULE 6.2.1 Boise Cascade and Oxford Consents and
Boise Cascade and Oxford Defaults
SCHEDULE 6.4.1 Tax Returns
SCHEDULE 6.4.2 Tax Returns Not Timely Filed and Tax
Payments Not Timely Paid
SCHEDULE 6.5 Reports of Noncompliance with Laws
SCHEDULE 6.6 Litigation
SCHEDULE 6.7 Contracts and Agreements
SCHEDULE 6.7.1 Collective Bargaining Agreements
SCHEDULE 6.7.2 Contracts and Other Agreements for the
Purchase or Sale of Product, Materials,
Supplies, Merchandise, or Services for
Use in the Conduct of the Business
SCHEDULE 6.7.3 Railroad Sidetrack Agreements
SCHEDULE 6.7.4 Trucking, Delivery, and Service
Agreements
SCHEDULE 6.7.5 Contracts and Other Agreements for Sale
of Assets
SCHEDULE 6.7.6 Joint Development, Joint Venture, or
Partnership Agreements Relating to the
Business
SCHEDULE 6.7.7 Contracts and Other Agreements
Containing Covenants Not to Compete
SCHEDULE 6.7.8 Contracts and Other Agreements Relating
to Acquisition of Any Operating
Business or Capital Stock
SCHEDULE 6.7.9 Options or Contracts for Purchase of
Fixed Assets or Real Property
SCHEDULE 6.7.10 Contracts or Other Agreements Requiring
Payment of Royalty, License Fee, Know-
How, Technical Fee, Override or Similar
Commission or Fee
SCHEDULE 6.7.11 Guarantees
SCHEDULE 6.7.12 Construction Agreements or Equipment
Purchase Orders
SCHEDULE 6.7.13 Employment and Consulting Agreements
SCHEDULE 6.7.14 Leases for Equipment or Machinery
SCHEDULE 6.7.15 Sales Agreements
SCHEDULE 6.7.16 All Other Contracts, Agreements, or
Commitments
SCHEDULE 6.7.17 Invalid Agreements
SCHEDULE 6.13 Liabilities
SCHEDULE 6.14.1 Labor Relations Matters
SCHEDULE 6.15 Product Claims
SCHEDULE 6.16 Employee Benefit Plans
SCHEDULE 6.17 Environmental Matters
SCHEDULE 6.17.2 Transportation, Storage, Treatment, or
Disposal of Hazardous Materials
SCHEDULE 6.17.3 Releases
SCHEDULE 6.17.4 CERCLA or State Sites and Requests for
Information
SCHEDULE 6.17.5 Preliminary Underground Storage Tanks,
Asbestos, and PCB Transformers
SCHEDULE 6.17.6 Environmental Audits; Environmental Site
Assessments; OSHA Citations; Ground
Water, Soil, or Air Monitoring; Claims
Notice of Violations; and Enforcement
Actions
SCHEDULE 6.17.7 Environmental Permits, Licenses, and
Authorizations Held by Boise Cascade and
Oxford
SCHEDULE 6.17.8 Agreements Concerning Environmental
Liabilities and Costs
SCHEDULE 6.18.2 Rumford Cogen and RCC Agreements
SCHEDULE 7.4 Purchaser Consents and Purchaser
Defaults
SCHEDULE 9.1 Operations
SCHEDULE 11.1 Salaried Vacation Policy
SCHEDULE 11.8 Gain Sharing Plan
SCHEDULE 19.8 Insurance and Indemnity Provisions
Pursuant to Regulation S-K, Item 601(b)(2), the
schedules have been omitted from this exhibit. The
company will furnish copies of any omitted schedule to
the Securities and Exchange Commission upon request.
